On December 16, the IRS released its Exempt Organization Newsletter, Issue Number 2011-19. Topics include the following:
- IRS Announces Two Month Suspension of IRS Modernized e-File Operations for 990 Filers
- IRS Reminds Hospital Organizations of 2011 Filing Requirements and Requests Additional Public Input
- IRS Issues 2012 Optional Mileage Rates
- Renew Your PTIN Now
- Exempt Organizations to Offer Internships for Students Interested in Nonprofit Management
- 2012 Workshops for Small and Medium-Sized 501(c)(3) Organizations
- Revised Publication 557 Now Available
- Treasury Issues Report on Supporting Organizations and Donor Advised Funds
The IRS today notified tax-exempt organizations that the IRS Modernized e-file (MeF) system will not be available from January 1, 2012 through February 29, 2012 for electronic filing of Forms 990, 990-EZ, 990-PF and 1120-POL information returns. The IRS is suspending the availability of the system to implement changes to IRS systems for the 2011 tax year. The 990-N e-postcard filing system will not be affected by the temporary suspension of the MeF system.
To minimize the impact on affected organizations, the IRS is granting an extension of time to file to March 30, 2012 to organizations whose due date or first extended due date is January 17 or February 15, 2012. Organizations required to file electronically may file electronically prior to January 1, 2012 or between March 1, 2012 and March 30, 2012. Affected organizations that are not required to file electronically may do the same and, alternatively, may file a paper return anytime before March 30, 2012. In addition, as described in Notice 2012-4, certain affected organizations normally required to file electronically will have the option to file a paper return during the suspension period.
An affected organization that has not previously received an extension and wishes to extend its filing due date until after March 30, 2012 may request an automatic 3-month extension by filing Form 8868, Extension of Time to File an Exempt Organization Return, by its original due date. If an affected organization has already obtained an automatic 3-month extension, the IRS will grant the organization an additional 3-month extension if the organization properly completes and files Form 8868 by its first extended due date. Organizations that have already been granted two extensions for a total of six months may not request a further extension.
Organizations are reminded that an extension of the time to file, including the automatic extension to March 30, 2012 provided in the Notice, is not an extension of time to pay any tax liabilities that may be due for the year.
Organizations with a filing due date (or first extended due date) between January 1, 2012, and February 29, 2012 that file their returns by March 30, 2012 will be considered to have timely filed. In the case of an organization with a second extended due date that falls during the suspension period, the organization will have reasonable cause for late filing and will not be subject to late filing penalties if it files by March 30, 2012. The organization should attach a Reasonable Cause Statement to its return referencing Notice 2012-4, to avoid receiving a system-generated late filing penalty notice from the IRS. An organization generally required to file electronically that has already obtained two three-month filing extensions may be uncomfortable with taking advantage of the late filing penalty relief provided in the notice. In that circumstance, the organization may file its return on paper.
See also IR-2011-120, Filing Deadline Extended to March 30 for Some Tax Exempt Organizations (December 16, 2011)
The IRS has released a draft version of the 2011 Form 990, Schedule H, Hospitals and its instructions. The IRS revised Schedule H to add Part V, Section B for tax year 2010 to gather information on hospital organizations’ compliance with new requirements imposed on tax-exempt hospitals by the Affordable Care Act.
Hospital organizations required to file Form 990 and Schedule H must complete all parts and sections of Schedule H for the 2011 tax year except for lines one through seven of Part V, Section B which relate to community health needs assessments. These lines will remain optional for tax year 2011 and are required only for tax years beginning after March 23, 2012. Hospital organizations must also attach a copy of their most recent audited financial statements to their tax year 2011 Form 990.
The IRS has made a number of revisions to the Schedule H and instructions for tax year 2011 in response to previous input from the public and the health care community. The IRS welcomes public input on Form 990 and its schedules, including Schedule H.
Such input must be submitted to Form990revisions@irs.gov or by mail to the following address by January 15 to be considered for tax year 2012 form revisions:
Internal Revenue Service
Attn: Stephen Clarke (Notice 2012-4)
1111 Constitution Avenue NW
Washington, DC 20224
The IRS has issued the 2012 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on January 1, 2012, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be
- 55.5 cents per mile for business miles driven
- 23 cents per mile driven for medical or moving expenses
- 14 cents per mile driven in service to charitable organizations
Taxpayers using the standard mileage rates must comply with Rev. Proc. 2010-51.
Notice 2012-01 contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.
Beginning January 1, 2011, all paid preparers must have a Preparer Tax Identification Number before preparing returns. You can sign up for your PTIN online or by paper application. It costs $64.25 per year. To submit a first-time PTIN application, view the checklist on IRS.gov to get started.
PTINs that were obtained for the 2011 filing season will expire on December 31, 2011. Renewal costs $63 and most preparers can renew online. Preparers who applied for their PTINs on paper will be able to renew either online or on paper.
To learn how to renew your PTIN and get more information about other return preparer requirements, go to the return preparer pages on IRS.gov
5. Exempt Organizations to Offer Internships to Students Interested in Nonprofit Management
In 2009, IRS Exempt Organizations (EO) established its Academic Institutions Initiative to work with educational entities to develop, cultivate and promote professionals who shape the non-profit sector. Our goal is to help prepare the non-profit leaders of the future by providing training about exempt organizations’ federal tax law responsibilities.
As part of this initiative, two or three graduate student interns who are interested in nonprofit management or policy will be selected to work in the IRS Exempt Organizations office as 2012 summer interns. Although these are unpaid positions, these student interns will have a unique opportunity to see how tax-exempt organizations handle their tax responsibilities and become familiar with Federal tax provisions that govern exempt organizations. If you or a graduate student you know might be interested please let them know about this internship opportunity. For more information, see our Internship Fact Sheet; if interested, apply by March 2, 2012.
Start off the new year right by planning to attend one of our workshops for small and mid-sized 501(c)(3) organizations.
Registration is now available for workshops in Montgomery, AL (January 24, 2012) and Mobile, Alabama (January 26, 2012) hosted by Auburn University.
Other workshops are scheduled for:
- Bloomington, IN (February 28) and Indianapolis, IN (February 29, 2012) hosted by the Indiana University -Bloomington School of Public and Environmental Affairs and the Center on Philanthropy at Indiana University
- South Orange, NJ (March 14, 2012) hosted by Seton Hall University
- Glassboro, NJ (March 15, 2012) hosted by Rowan University
- Lincoln, NE (May 22, 2012) and Kearney, NE (May 24, 2012) hosted by University of Nebraska – Lincoln – Extended Education & Outreach/Department of Conferences & Professional Development
Registration information on other workshops will be available soon. Check our Calendar of Events for the latest information!
Each one-day workshop, presented by experienced Exempt Organizations specialists, will explain what 501(c)(3) organizations must do to keep their tax-exempt status and comply with tax obligations. This popular introductory workshop is designed especially for administrators or volunteers who are responsible for an organization’s tax compliance as well as those interested in careers in the nonprofit sector.
An updated edition of the popular IRS Publication 557, Tax-Exempt Status for Your Organization is now available on IRS.gov. Be sure to check out What’s New and Reminder sections.
Publication 557 provides an overview of the rules and procedures that apply to organizations that seek recognition of exemption from federal income tax under section 501(a) of the Internal Revenue Code.
As mandated by the Pension Protection Act of 2006, the Department of Treasury conducted a study of the organization and operation of supporting organizations and donor advised funds. The Department of Treasury issued its report to Congress on the findings of the study on December 5, 2011.