Year-end reminder: Expanded tax benefits help individuals and businesses give to charity during 2020 

The IRS today explained how expanded tax benefits can help both individuals and businesses give to charity before the end of this year.

The Coronavirus Aid, Relief and Economic Security (CARES) Act, enacted last spring, includes four temporary tax changes that are designed to help people and businesses who give to charity this year. Here is a rundown of these key changes. 

Update on Mandatory E-Filing in 2021

The Taxpayer First Act, enacted July 1, 2019, requires tax-exempt organizations to electronically file information returns and related forms. The new law affects tax-exempt organizations in tax years beginning after July 1, 2019. 

• Tax Year 2020 Forms 990-T & 4720 Are Being Revised and Will be Available for E-filing in 2021

In 2020, the IRS continued to accept paper Form 990-T, Exempt Organization Business Income

Special Tax Deduction for Cash Donations to Charities in 2020

In the latest post on A Closer Look, Tax Exempt and Government Entities Commissioner Edward Killen reminds taxpayers there’s a special deduction for cash donations of up to $300 to a qualified charity in 2020. This $300 deduction is designed for taxpayers who take the standard deduction and aren’t normally able to deduct their donations.

Before making a donation, use the Tax Exempt Organization Search (TEOS) tool on IRS.gov/TEOS to make sure the charitable organization is eligible for tax-deductible donations.

The post also includes several other important reminders for taxpayers and charities, along with information and links to other temporary provisions of the relief provided in the CARES Act.

IRS Accepting Digital Signatures and Emailed Documents

The IRS issued a memorandum (PDF) that extends (through June 30, 2021) IRS employees’ ability to accept:

• Images of signatures
  

The Tax Exempt & Government Entities (TE/GE) FY 2021 Program Letter (PDF) lists our priorities for this new fiscal year. We’ll also use our new Compliance Program and Priorities webpage to provide information about additional priorities at the end of each quarter during the fiscal year.

Our FY 2021 compliance program and prioritiesalign with the IRS Strategic Goals:

• Strengthen Compliance Activities
• Improve Operational Efficiencies
• Maintain a Taxpayer-Focused Organization
• Ensure Awareness and Collective Understanding
• Leverage Technology and Data Analytics
• Develop Our Workforce

We’ll release a summary of our FY 2020 accomplishments when all the data is available. You can also view our annual program (or work plan) and accomplishment letters for previous years.

Annual filings and tax returns/payments due July 15, 2020

The extended deadline for a variety of information and tax returns and many tax payments is July 15, 2020. If you are unable to meet the July 15 deadline, you may want to review the extension procedures for exempt organization returns and information on the penalties for not filing.

EO user fee changes effective July 1, 2020

Revenue Procedure 2020-5 included user fee changes for certain miscellaneous determination requests submitted on Form 8940 that are effective July 1st.  See Appendix A of Rev. Proc. 2020-5 for a schedule of user fees.

Electronic filing mandate for Forms 990 and 990-PF

Effective for tax years beginning after July 1, 2019, the Taxpayer First Act requires organizations exempt from taxation under section 501(a) to file their annual Form 990 and Form 990-PF returns electronically,

IRS solicits public comments on proposed changes to group exemption letter program; will temporarily stop accepting requests for group exemption letters on June 17, 2020 

Notice 2020-36 contains a proposed revenue procedure that sets forth updated procedures under which recognition of exemption from federal income tax for organizations described in Section 501(c) of the Internal Revenue Code may be obtained on a group basis for subordinate organizations affiliated with and under the general supervision or control of a central organization. The IRS requests comments on all aspects of the proposed revenue procedure, including applicable grandfather and transition rules. Comments should be submitted on or before August 16, 2020.

Pending publication of the final revenue procedure in the Internal Revenue Bulletin, Rev. Proc. 80-27 continues to apply. However, the IRS will not accept any requests for group exemption letters beginning June 17, 2020, until publication of the final revenue procedure