E-File Deadline Draws Near For Tax-Exempt Entities

by Leroy Baker, Tax-News.com, New York

09 May 2006

The Internal Revenue Service has reminded large tax-exempt organizations that they have until May 15 to electronically file federal information returns.

For the first time, exempt organizations are required to file these returns electronically if they have $100 million in total assets and file at least 250 returns per year –– including income, excise, employment tax and information returns.

“IRS has worked closely with our stakeholders to ensure that our e-filing procedures meet their needs,” commented Steven T. Miller, Commissioner of the IRS Tax Exempt and Government Entities Division.

“But equally important is that e-filing greatly enhances the transparency of the operations of the tax-exempt community, a key component of public confidence," he added.

The IRS has already received more than 3,600 information returns this year from exempt organizations taking advantage of electronic filing, which has been available to tax-exempt organizations since 2004. The IRS received about 6,700 electronically filed information returns from tax-exempt organizations in 2005.

Exempt organizations that cannot meet the May 15 deadline may request an automatic extension to August 15, 2006. Exempt organizations are encouraged to file their extension forms electronically as well.

For tax years ending on or after Dec. 31, 2006, the electronic filing requirement will be expanded to include the year 2006 returns of tax-exempt organizations with $10 million or more in total assets that file at least 250 returns per year.

In addition, private foundations and charitable trusts will be required to electronically file regardless of asset size, if they file at least 250 returns per year.

Because of the ease with which organizations can electronically file, the IRS is encouraging all tax-exempt organizations to do so voluntarily.

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