e-file for Business and Self-Employed Taxpayers

Forms 990, 990-EZ, 990-PF, 1120-POL, 8868 and 7004

Introduction

Electronic filing is quick, secure, and more accurate than filing a paper return; and e-filing provides fast acknowledgement that the IRS has received the return. E-filing reduces normal processing time and makes compliance with reporting and disclosure requirements easier. Charities and non-profits can file the following forms electronically through an Approved IRS 990-efile Provider.

• Form 990, Return of Organization Exempt from Income Tax
• Form 990-EZ, Short Return of Organization Exempt from Income Tax
• Form 990-PF, Return of Private Foundation
• Form 8868, Application for Extension of Time To File an Exempt Organization Return
• Form 1120-POL, U.S. Income Tax Return of Political Organizations
• Form 7004 (extension form for the 1120-POL)

E-filing is required for certain large tax-exempt organizations as described below. All charities and non-profits are encouraged to take advantage of the many benefits of electronic filing. Refer to Frequently Asked Questions (FAQs) - e-file for Charities and Non-profits for additional information.

The Fed/State System for exempt organizations was implemented in 2009. IRS worked with more than 25 states to develop requirements to permit transmitters to submit multiple federal and state return types within one transmission. States that choose to participate must complete the registration and testing process before opening Fed/State Filing. Participating states will be listed on this IRS Web site as they complete this process.

Filing schemas, publications, user guides for software developers and transmitters, and others interested in technical details are also available.

IRS e-file Requirements for Large Tax Exempt Organizations

On January 12, 2005, the IRS released temporary regulations that require some tax-exempt organizations to e-file annual exempt organization returns. For tax years ending on or after December 31, 2009, the electronic filing requirement applies to exempt organizations with $10 million or more in total assets ($100 million in 2005) if the organization files at least 250 returns in a calendar year, including income, excise, employment tax and information returns. Private foundations and charitable trusts will be required to file Forms 990-PF electronically regardless of their asset size, if they file at least 250 returns annually.

Example of an organization meeting the 250 return criteria: If a tax-exempt organization that meets the asset criteria has 245 employees, it must file Form 990 electronically because each Form W-2 and quarterly Form 941 is considered a separate return; therefore, the organization in this example would file a total of 250 returns(245 W-2's, four 941's, and one 990).

Large tax-exempt organizations that prepare their own returns can be authorized by the IRS as a "Large Taxpayer" to file their own return electronically, or use a tax professional who is an IRS Authorized e-file Provider. IRS e-file for Large Tax-Exempt Entities Filing Their Own Information Returns contains important information and includes step-by-step instructions on how to complete the necessary registration and IRS e-file application.

Requesting a Waiver from Required e-filing

Notice 2005-88 establishes criteria under which tax-exempt organizations can request waivers from the electronic filing requirement:

• Where the exempt-organization can not meet electronic filing requirements due to technology constraints;  or
• Where compliance with the requirements would result in undue financial burden on the filer.

Information for Tax Professionals

Tax professionals who plan to file Forms 990, 990-EZ, 990-PF or 1120-POL electronically must submit a new or revised electronic IRS e-file application using the electronic e-services application. This is a one-time registration process and you must apply at least 45 days before you plan to file electronically.

Electronic Federal Tax Payment System (EFTPS)

Pay all of your taxes electronically using EFTPS. Once you are enrolled, you can pay all types of taxes year-round. EFTPS is a free electronic payment option available to pay all Federal taxes electronically.