Two-Month Suspension of IRS e-File Operations for All 990 Filers; Hospitals Advised About 2011 Schedule H Requirements
December 22, 2011
All 990 Filers
The IRS issued Notice 2012-4, on December 16, 2011, which notified tax-exempt organizations that the IRS's modernized e-file (MEF) system will not be available from January 1, 2012, through February 29, 2012, for electronic filing of Forms 990, 990-EZ, 990-PF, and 1120-POL information returns. The IRS is suspending the availability of the system to implement changes to IRS programs and systems for the 2011 tax year. The 990-N e-postcard filing system will not be affected by the temporary suspension of the MEF system.
To minimize the impact on affected organizations, the IRS is granting an extension of time to file to March 30, 2012, to organizations whose due date or first extended due date for returns is January 17, 2012, or February 15, 2012. Affected organizations required to file electronically may file electronically prior to January 1, 2012, or between March 1, 2012, and March 30, 2012. Organizations that are not required to file electronically may do the same and, alternatively, may file a paper return any time before March 30, 2012. In addition, as described in Notice 2012-4, certain affected organizations normally required to file electronically will have the option to file a paper return during the suspension period.
An affected organization that has not previously received an extension and wishes to extend its filing due date until after March 30, 2012, may request an automatic three-month extension by filing Form 8868, Extension of Time to File an Exempt Organization Return, by its original due date. If an affected organization has already obtained an automatic three-month extension, the IRS will grant the organization an additional three-month extension if the organization properly completes and files Form 8868 by its first extended due date. Organizations that have already been granted two extensions for a total of six months may not request a further extension.
Organizations are reminded that an extension of the time to file, including the automatic extension to March 30, 2012, provided in the announcement, is not an extension of time to pay any tax liabilities that may be due for the year.
Organizations with a filing due date (or first extended due date) between January 1, 2012, and February 29, 2012, that file their returns by March 30, 2012, will be considered to have filed in a timely manner. In the case of an organization with a second extended due date that falls during the suspension period, the organization will have reasonable cause for late filing and will not be subject to the late filing penalties if it files by March 30, 2012. The organization should attach a Reasonable Cause Statement to its return, referencing Notice 2012-4, in order to avoid receiving a system-generated penalty notice for late filing. Some organizations generally required to file electronically that have already obtained two three-month filing extensions may be uncomfortable with taking advantage of the late-filing penalty relief provided in this notice. In that circumstance, the organization may file its return on paper during the suspension.
The IRS has released a draft version of the 2011 Form 990, Schedule H, Hospitals, and its instructions. The IRS continues to seek input from the public on how to improve the Schedule. The IRS revised Schedule H to add Part V, Section B for tax year 2010 to gather information on hospital organizations' compliance with new requirements imposed on tax-exempt hospitals by the Patient Protection and Affordable Care Act.
Hospital organizations required to file Form 990 and Schedule H must complete all parts and sections of Schedule H for the 2011 tax year except for lines one through seven of Part V, Section B, which relate to community health needs assessments. These lines will remain optional for tax year 2011 and are required only for tax years beginning after March 23, 2012. Hospital organizations must also attach a copy of their most recent audited financial statements to their tax year 2011 Form 990.
The IRS has considered public input on Schedule H, Part V, Section B and has revised this section and its instructions for tax year 2011. The IRS welcomes public input on Form 990 and its schedules, including Schedule H.
Such input must be submitted to Form990revisions@irs.gov or by mail to the following address by January 15 to be considered for tax year 2012 form revisions:
Internal Revenue Service
Attn: Stephen Clarke (Notice 2012-4)
1111 Constitution Avenue NW
Washington, DC 20224
If you have questions about Form 990, Schedule H, Part V, Schedule B, contact Terri Rexrode