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Six Month Extension of Time to File Form 990 Enacted by Congress

Applies to 2016 Form 990 series returns.

This new law only applies to exempt organization tax returns for years beginning after December 31, 2015.

This means that it will apply to 2016 Form 990 and later years, which will generally be due in 2017  or later (except for certain short-year 2016 returns).

For returns beginning in 2015 or earlier years, the protocol for obtaining extensions still requires that in order to receive a six month extension of time to file, the organization must request a three month extension, then before the first extended due date expires, it must request a second three month extension.

Form 990-T has always had a six month extension of time to file and that will not change.

The new law granting six month extensions of time to file an exempt organization return found in Section 2006 of H.R. 3236, aka Surface Transportation and Veteran’s Health Care Choice Improvement Act of 2015

The language in the law states, in relevant part:
—In the case of returns for taxable years beginning after December 31, 2015,
the Secretary of the Treasury, or the Secretary’s designee, shall
modify appropriate regulations to provide as follows:

(4) The maximum extension for the returns of organizations
exempt from income tax filing Form 990 (series) shall be an
automatic 6-month period ending on November 15 for calendar
year filers.
(5) The maximum extension for the returns of organizations
exempt from income tax that are required to file Form 4720
returns of excise taxes shall be an automatic 6-month period
beginning on the due date for filing the return (without regard
to any extensions).

Note that the 6 month extension is considered “automatic,” which means that the organization does not have to provide a reason for requesting an extension of time to file. It does NOT mean that the extension automatically goes into effect without any action by the organization. The organization or its representative must file with the IRS, either electronically or on paper, a request on the designated form (currently Form 8868), on or before the due date of the return. Filing an extension request even one day late will normally result in an invalid extension.

This revision in the extension provision is great news and will reduce the filing burden on exempt organizations and their representatives. Many organizations currently find themselves in penalty situations either because the thought the first extension for six months and failed to file a second extension, or they simply forgot to file a second extension request.

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