Helpful Tips For IRS Communications in a Pandemic

It is no secret that the IRS has had its struggles since the pandemic hit. From erroneously revoking charitable status of numerous nonprofits to lengthy delays in processing returns, the IRS remote work environment, like with most institutions, has presented its challenges.

However, there has been news coming from the IRS that it is moving more projects forward.

Have a Complaint?

Many people are unaware that the IRS has a formal process for filing a complaint with the IRS about an organization that they may feel is not abiding by tax-exempt rules. The IRS has updated its website regarding this process. Form 13909 Tax-Exempt Organization Complaint (Referral) Form is available on the IRS website and may be used to file a complaint.

The following information is requested on the form:

• The name, address, and employer identification number (EIN) of the suspect organization.
• The nature of the violation (e.g., the directors/officers/founders of the organization are using the organization for personal gain).
• The details of the violation such as the name of the person involved in the violation, their position with the organization, dates and amounts involved (if known).
• Contact information for the complainant (i.e., the individual submitting the form).

 The IRS will acknowledge receipt of the complaint. However, it will not provide a progress or status update.

Modified IRS Exams Extended  

In a memo to Tax-Exempt and Government Entities examination employees, the IRS Tax-Exempt and Government Entities (TE/GE or TEGE) Division has extended until September 30, 2021, its guidance regarding extension of “modified exam activities.”

The memo provides that all TE/GE exam activities will continue under normal procedures, except what is referred to as “modified exam activities.”

In-person appointments are still being scheduled, but the IRS wants to limit face-to-face taxpayer interaction to only when necessary and with consent of the taxpayer and approval of an IRS manager.

Otherwise, the IRS is encouraging appointments to continue to be scheduled virtually by teleconference, WebEx or Zoom.gov. The IRS continues to support performing its work virtually to accommodate its employees and taxpayers who may have concerns with in-person contact.

Electronic Filing

As mentioned at the beginning of this article, the IRS is experiencing delays in processing paper returns and extension requests. It is possible that nonprofits that file a paper 990-EZ may have received a notice of non-filing.  Likewise, if a paper-filed Form 8868 was filed, there may be a delay in receiving a notice confirming approval of the extension request. The IRS is requesting that if you did file a paper return or extension request that you do not file a second return or contact the IRS about the status of your filing.

As a reminder, all Form 990s are now required to be filed electronically. Nonprofits that file a 990-T must do so electronically for all returns with a due date of April 15, 2021, or later.

For nonprofits that file a 990-EZ, beginning with tax years ending July 31, 2021, or later, all returns must be electronically filed. The IRS will be sending an educational letter to those organizations that are filing paper 990-EZs.

In addition, effective June 16, 2021, Private Foundations that file a Form 4620 are required to file electronically. Originally required for tax years beginning July 1, 2019, this mandate was suspended while the IRS developed software to accommodate the electronic version.

For additional assistance with these issues, reach out to Marc Kotsonas, CPA or contact our Not-for-Profits Team to be of help to you in any way.

You can also read this article about nonprofit reporting requirements for COVID-19 funding.