INSIGHTS AND RESOURCES

Form 4720 e-filing mandate now in effect for private foundations

TAX ALERT  | 

Authored by RSM US LLP


On June 16, 2021, the IRS announced in an Exempt Organizations Update that mandatory electronic filing of 2020 Forms 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code, for private foundations begins June 16, 2021.

The Taxpayer First Act of 2019 (Pub. L. 116-25) mandated electronic filing of the Form 4720 for private foundations (among other returns) for tax years beginning after July 1, 2019. However, pending conversion of Form 4720 to electronic format, the IRS continued to accept paper returns through the 2019 version. In Notice 2021-01, the IRS continued to accept paper-filed 2020 Forms 4720 while software for the electronic version was under development. Read RSM Tax Alert.

Beginning June 16, 2021, all 2020 Forms 4720 filed by private foundations with a due date on or after July 15, 2021 must be e-filed. The 2020 Form 4720 and instructions have been updated to reflect the mandatory e-filing requirement for 2020 private foundation returns. As a reminder, the IRS will no longer permit joint Form 4720 submissions because the electronic filing system only allows for one taxpayer per return. 

The IRS will accept completed 2020 Forms 4720 with a due date on or after July 15 in paper format that were postmarked on or before June 16, 2021. 

Organizations other than private foundations that are required to file Form 4720 are encouraged, but not required, to file Form 4720 electronically.

Information about software providers supporting electronic filing of Form 4720 can be found on the Exempt Organizations Modernized e-File (MeF) Providers page. The IRS will continue to update this page as it approves additional providers.

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This article was written by Alexandra Mitchell, Morgan Souza and originally appeared on 2021-06-16.
2021 RSM US LLP. All rights reserved.
https://rsmus.com/what-we-do/services/tax/federal-tax/form-4720-e-filing-mandate-now-in-effect-for-private-foundations.html

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