The Coronavirus “Era” (that we are still not through) has hit many of us in different ways. Through the negatives, we have learned much and – in some cases – become better at what we do. But it has been a struggle.
Even though the IRS has recently been super-funded by Congress, they, more than many, found the COVID days to be a steep uphill battle. Coronavirus relief provisions, new tax rules, work-from-home dynamics, beaucoup retirements provided many challenges for the Service.
Now, as unlikely as it might seem, the IRS has provided another measure of COVID relief. Just announced with IRS Notice 2022-36, they are “forgiving” some late-filing penalties on some returns. Included in the list of returns is Form 990-T that some higher education institutions are required to file annually.
If your institution received penalty notices for late filing Form 990-T, relief is given under Notice 2022-36. This does not cover late payment/failure to pay penalties.
In another scenario, if an institution has not yet filed their 990-T returns for the 2019 and/or 2020 taxable year(s), they may file prior to September 30, 2022 with no penalties!
In short, the Notice “… provides relief for certain taxpayers from certain failure to file penalties and certain international information return (IIR) penalties with respect to tax returns for taxable years 2019 and 2020 that are filed on or before September 30, 2022. This notice also provides relief from certain information return penalties with respect to taxable year 2019 returns that were filed on or before August 1, 2020, and with respect to taxable year 2020 returns that were filed on or before August 1, 2021. The relevant penalties will be waived or, to the extent previously assessed, abated, refunded, or credited. [underline added.]
From Notice 2022-36:
Waiver and Abatement of Certain Penalties for Taxpayers
The IRS will not impose the penalties listed in section 3.A.(1) through (4) of this notice with respect to the specified tax returns for taxable years 2019 and 2020 that are filed on or before September 30, 2022. The penalties listed in this section 3.A of this notice will be automatically abated, refunded, or credited, as appropriate without any need for taxpayers to request this relief.
· Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as Private Foundation; and Form 990-T, Exempt Organization Business Income Tax Return (and Proxy Tax Under Section 6033(e)) [one item on the listing]
At the end of the day, you should converse amongst your management team and tax advisors and discern whether this new “2022-36 relief” may be something your institution might be able to take advantage of.
Written byDavid C. Moja, CPA www.mojacompany.comThe information provided herein presents general information and should not be relied on as accounting, tax, or legal advice when analyzing and resolving a specific tax issue. If you have specific questions regarding a particular fact situation, please consult with competent accounting, tax, and/or legal counsel about the facts and laws that apply.
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