Is there an e-filing requirement for a 990, 990-PF, 990-EZ, or 990-T return?
Yes, for an exempt organization with a tax
year beginning on or after July 1, 2019, Public Law 116-25, Section 3101 requires that returns be filed
electronically. This requirement will apply to Forms 990, 990-PF, 990-EZ, and 990-T. For calendar year filers, the requirement will take place for tax-exempt organizations starting in tax year 2020.
e-Filing for Form 990-T was enabled with an update on 3/17/2023 in Drake23. It was not available until that date because of an IRS system upgrade.
There are several listed consequences to not e-filing or filing a return. If there is an e-filing requirement for the organization and the return is paper-filed, the instructions state that "...the organization is considered not to have filed its
return..." In addition, "if an organization does not file as required for three consecutive years, it automatically loses its tax-exempt status." See the 990 Instructions and IRS Annual Filing and Forms page for details.
For small exempt organizations, the legislation specifically allows a postponement (“transitional relief”). For tax years ending before July 31, 2021, the IRS will accept either paper or electronic filing of Form 990-EZ, Short Form Return of Organization Exempt from Income Tax. For tax years ending July 31, 2021, and later, Forms 990-EZ must be filed electronically.
For more information, see the IRS website.