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Many thanks to our EDINews subscribers who requested to receive our online newsletter via email. We appreciate your interest. If you're new to EDINews, catch up on the back issues then check the IRS website for the latest information. |
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APRIL
2005 - FINAL
ONLINE ISSUE |
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As
EDIN comes to a close, our goals for
a streamlined system for nonprofit
reporting and an online, searchable
database of accurate, complete and
timely information on nonprofit organizations
are within reach. The IRS now accepts
Forms 8868, 990, 990EZ and 990-PF for
electronic filing. Four software products
have been approved by the IRS for e-filing
information returns, including UltraTax
(Creative Solutions), TrustEase (Fast-Tax), ProSystem fx
(CCH), and 990
Online (available free from the National Center for
Charitable Statistics). Approximately 975 Forms 990, 990EZ
and 8868 were electronically filed in calendar year 2004.
This year, 613 information returns, 158 extensions, and
19 990PF's were e-filed as of April 17, 2005.
Earlier this year,
the IRS issued temporary regulations
requiring certain large exempt organizations
to file electronically (see below, Electronic
Filing News for 2005). INDEPENDENT SECTOR/EDIN submitted
comments to the IRS as did the Council
on Foundations.
EDIN's key contribution
to advancing electronic filing was
our convening an ad
hoc working group of nonprofit
organization executives, state charity
officials, tax preparation software
developers, legal advisors and accountants
with expertise in nonprofit reporting
to discuss federal policy, state reporting,
technical, and compliance issues. The
working group submitted its observations
and recommendations to the EDIN
Steering Committee, which has issued
its final report.
Many thanks to all
who participated in this project and
to our funders who made our efforts
possible.
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Electronic
Filing News for 2005
The IRS released its newest
electronic form for the tax exempt community
by offering electronic filing of the Form
990-PF (Return of Private Foundation) in January
2005. The electronic Form 990-PF is similar
to the electronic forms released in 2004,
in that PDF attachments
will not be required or accepted with electronically
filed Forms 990-PF. In all situations where
you are asked to provide an explanation
or description, the software will prompt
you for the necessary information and automatically
creates the proper "attachment".
Please ask your software provider about
their plans for adding import routines
to their software that would allow for
capturing financial data into the electronic
'attachments'. Check the Approved
IRS e-file Providers listing for
links to companies that offer electronic
filing of the Forms 990, 990-EZ, 990-PF,
1120-POL, and the extension Form 8868.
Future plans for electronic filing include
the availability of the State Retrieval
System in 2006, and the Form 990-T (Exempt
Organization Business Income Tax Return)
available in 2007.
IRS e-file Requirements
for Large Tax Exempt Organizations
On January 12, 2005, the
IRS released regulations that require certain
tax-exempt organizations to file annual
exempt organization returns electronically
beginning in 2006. For tax year 2005
returns due in 2006, the regulations require
organizations with total assets of $100
million or more to file electronically.
The electronic filing requirements only
apply to entities that file at least 250
returns, including income tax, excise tax,
employment tax, and information returns,
during a calendar year. For example,
if an organization has 245 employees, it
must file Form 990 or
Form 990-PF electronically, because each Form W-2 and quarterly
Form 941 is considered a separate return; thus the organization
files 250 returns (245 W-2's, four 941's, and one 990/990-PF).
Beginning in 2007, private
foundations and charitable trusts will
be required to electronically file Form
990-PF regardless of their asset size,
if they file at least 250 returns.
Additional information regarding
the new IRS e-file requirements
including Frequently Asked Questions, can
be found on www.irs.gov/e-file,
click on 'required' under e-file for Charities
and Non-Profits.
IRS Offers New E-Subscription
Site for Exempt Organizations
EO Update, a new subscription
e-mail service from the IRS, publishes
current news and information impacting
the tax-exempt community. Subscribers receive
periodic e-mail updates and alerts about
developments in exempt organizations tax
law and regulations, upcoming IRS training
and events, and other information, such
as:
- News releases from the
IRS related to exempt organizations
- new IRS forms, guidance
and other publications
- changes and additions
to the IRS
Charities and Nonprofits section
of the IRS.gov Web site
- upcoming IRS training
and outreach events
Previous editions of EO
Update can be accessed through the IRS
Charities and Nonprofits section of
the IRS.gov Web site. Subscribe to
the EO-Update e-mail list by sending a
blank e-mail.
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e-Filing Highlighted at
Urban Institute's 15th Annual
Form 990 Meeting, April 20
IRS exempt organizations
staff, state charity officials, nonprofit
state association leaders, and nonprofit
financial experts met April 20 at the Urban
Institute in Washington, DC for the 15th
annual meeting on Form 990 issues, including
electronic filing of the Forms 990. The Urban
Institute’s National Center for Charitable
Statistics (NCCS) has developed 990
Online© a free, IRS-approved
system to prepare and electronically file
the Form 990 and Form 990-EZ. The software
calculates totals, includes nearly 50 standard
attachments, and verifies the accuracy and
consistency of the return. It also creates PDF files
for printing or distribution. The software
also includes Form 8868, request for extension.
Free technical assistance is available. For
more information, contact Linda
Lampkin.
Progress on State E-filing
GuideStar and NCCS are
working to support IRS plans for a single-point
filing and retrieval system by developing "super
schemas"—state specific filing
requirements in XML, the uniform computer
language used by the IRS for its Modernized
E-File Program. The schemas will be available
to software providers to develop e-filing
software that integrates federal and state
reporting. These efforts contribute to the
development of NASCOnet,
a secure platform for sharing information
between state charity regulatory agencies
made possible by a U.S. Department of Commerce
Technology Opportunity Program (TOP) grant
to GuideStar in October 2003. EDIN was pleased
to be a partner on NASCOnet by leveraging
its outreach to help build involvement in
electronic registration at the state level
and serve as a meeting ground for interested
stakeholders.
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