Various exempt organization notices paused

By Paul Bonner

The IRS said Friday it is suspending its issuance of 10 notices generally sent to tax-exempt organizations about late return filings.

The IRS listed the paused notices in its periodic Exempt Organization Update newsletter for charities and not-for-profit organizations. Like its suspension earlier of a broader range of notices and letters to other taxpayers, the IRS said it is suspending these notices because the notices, which are generally automatically triggered by a filing-related deadline, may be erroneous.

"Due to the historic pandemic, the IRS hasn't yet processed several million returns filed by individuals and entities," the update stated. "The suspension of these notices will help avoid confusion when a filing is still in process."

Some organizations and tax professionals may still receive one or more of the notices "in the next few weeks," the IRS said in the update, adding, "Generally, there is no need to call or respond to the notices as long as the return was filed timely."

Several of the notices relate to Form 990, Return of Organization Exempt From Income Tax, and similar forms in that series. Form 990 generally must be filed by the 15th day of the fifth month after the end of the organization's accounting period (i.e., May 15 for a calendar-year filer). Three relate to Form 5500, Annual Return/Report of Employee Benefit Plan, an annual report filed with the U.S. Department of Labor with information about an employer's qualified retirement plan's financial condition, benefits, participants, administration, and other details.

The suspended notices are:

  • CP214, Reminder Notice About Your Form 5500-EZ or 5500-SF Filing Requirement
  • CP217, Form 940 Not Required — Federal, State, and Local Government Agencies
  • CP259A, First Taxpayer Delinquency Investigation Notice — Form 990/990EZ/990N
  • CP259B, First Taxpayer Delinquency Investigation Notice — Form 990PF
  • CP259D, First Taxpayer Delinquency Investigation Notice — Form 990T
  • CP259F, First Taxpayer Delinquency Investigation Notice — Form 5227
  • CP259G, First Taxpayer Delinquency Investigation Notice — Form 1120-POL
  • CP259H, First Taxpayer Delinquency Investigation Notice — Form 990/990EZ
  • CP403, First Delinquency Notice — Form 5500 or 5500-SF
  • CP406, Second Delinquency Notice — Form 5500

In February, the IRS announced a suspension, which is ongoing, of 10 notices plus their Spanish-language versions informing individual and business taxpayers of unfiled tax returns, tax balances due, and intent to levy. However, tax policy advocates and professional groups including the AICPA have requested the IRS suspend more notices and clarify inconsistencies in public statements about how many and which notices it has suspended — as has Congress.

In a March 11 letter, 100 U.S. senators and representatives asked the IRS to identify which notices the IRS had not yet suspended that it has the authority to suspend and, with respect to those notices, why it has not yet done so. The letter also asked whether the IRS was working to suspend additional notices and when that work will be completed.

It was not immediately clear Friday whether the latest announcement was in response to those requests or whether the answers sought by Congress were provided by the legislators' requested deadline of March 14.

— To comment on this article or to suggest an idea for another article, contact Paul Bonner at Paul.Bonner@aicpa-cima.com.

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