Why Does the IRS Mandate E-Filing Form 990?
This week’s tax talk is all about the IRS E-File mandate, guest-starring client support representative Crissy!
All right, guys, welcome back! Thank you again for joining us. Um, again, my name is Nikita. I’m the product manager for Tax990. Tax990 is an authorized e-file provider with the IRS for filing 990 series returns.
Today, I have Crissy here with me. Crissy is one of our support representatives. She is the one answering the phone for you guys every time you call in and helping you with your questions.
Hi, thanks for having me here.
So, today we’re going to talk about the IRS e-file mandate. Um, last week, if you caught that episode, we talked a little bit about the different 990 series forms.
Today, we’re going to go into a little bit more of why the IRS mandated e-filing and kind of what that looks like for organizations, and some common questions we get in regards to that topic.
So, Crissy takes a lot of phone calls from clients that haven’t filed electronically yet. Crissy, if you want to talk a little bit about what your experience is with those clients and some of the basic questions that they have.
So, a lot of organizations are unaware of the e-file mandate, so that’s where they get messed up at because they send their filings in on paper, it gets rejected, and then they have to backfile for the years 2020 and up to the current year.
Right, because it was mandated back in 2019, and people are just still, they’re still paper filing because I think the IRS doesn’t always effectively communicate some of that information, which is really difficult, especially for smaller organizations, I think, to keep up on. Would you kind of agree?
Yeah, we get a lot of questions about the annual requirement for e-filing. Most of the time, they’re getting letters from the IRS stating that they’re needing to file these taxes, and then they come to us, and we try to walk them through the process of e-filing the most important return at that point and then catching up those past years.
So, when a client calls in and they are trying to backfile forms or they say they got a letter from the IRS, what does that typical conversation look like? What are your normal suggestions for our clients that have no idea what to do?
We usually suggest that they call the IRS first to confirm what years they need to file for, and then they can come back to Tax990, and we’ll walk them through the process and get them caught up.
Okay, so if you don’t already know, Tax990 support supports the current and two prior years. So, right now, we have the 2020, 2021, and 2022 available. So, if you do need to backfile any of those years, you can do that through us. For anything prior to that, what do you typically suggest for a client?
If they need to backfile, like a 2019 form, they’ll need to reach out to the IRS to determine what they suggest them to do.
So, we get, I think, a lot of questions, I feel like we get a lot of questions from clients that are just frustrated because it’s scary to get a letter from the IRS.
What do you think some of the reasons are that the IRS went towards this e-file mandate?
So, e-filing provides a quicker turnaround and allows the IRS to keep track of the information that they’re processing easier. It basically just has a lot to do with streamlining the process.
Yeah, I would agree with that. I think, from what we’ve seen, you get a turnaround time on your form status within a couple of days, which is really helpful, especially when you’ve just gotten a letter from the IRS and you don’t know what to do next. You know, noticing in just a few days after filing your form that it’s been accepted probably takes a little bit of pressure off of the organizations.
I’ve also spoken to clients, and I think a lot of the reason the IRS went towards the e-file mandate is just because it helps the IRS ensure the information is correct and that the organization is providing the right information. Do you feel like you’ve had conversations or you’ve experienced those kinds of things as well?
Yes, some conversations about rejections due to EINs not matching what’s in the database, and a lot of the time, it’s because they haven’t filed their back taxes, and the IRS has put them on the auto-revocation list, and they don’t realize it. So then they’ll have to reach out to the IRS, figure out what taxes need to be filed, and then they can come back and file with us.
That’s a good point, just for an organization to know if they’ve been put on the revoked list. Like it’s just so rare that they even realize that that had happened. Um, so that is a good point and e-filing allows them to know that a little bit sooner because they know that their forms are rejected within a couple of days of filing and they know that they need to call the IRS.
The other thing I think with the e-file mandate is it helps organizations know like what form they should file. Um, you know in our last video, if you guys caught that, we talked about specific requirements for the different forms, so e-filing allows you to know if you filed the wrong form.
If you’re a private foundation and you filed a 990 instead of the PF, you’re going to know that right away and can resolve those things before the IRS revokes your status or before they initiate penalties and things like that. So, again, I think it all kind of boils down to that streamlined process.
Yes, and the good thing about Tax990 forms is once you have your information entered, if your gross receipts don’t match the requirement of that form, it will give you an error and tell you what you need to be filing for that amount of receipts.
That’s true, the audit error helps a lot I think with some of those catching it before it’s sent kind of things. Yeah, absolutely.
Um, well, I mean, I think that’s about it today as far as the IRS e-file mandate goes, you guys. You have to e-file. That’s just the way of the world anymore. So, find a provider. Tax990 is available. We have our lovely support team here to help you when you have questions.
If you’re not sure of the mandate, if you have questions, if you just need to talk it out with somebody, please give us a call. We’re happy to help walk you through those steps and get you started in that process because it’s not going to change. It’s something that you’re going to have to do annually from year to year moving forward, electronically.
So, go on Tax990.com, check out our forms, create accounts. You know, you can play around in the account and get a feel for it. If you have questions, give us a call. Our support team is happy to help here.
Again, follow us on YouTube, follow us on our different socials. We have a lot of good tools out there and resources that you guys can use to help make sure that you’re in good standing with the IRS and you’re providing accurate information, so on and so forth. So, use our tools, use our support team, take advantage of all of the wonderful things Tax990 currently is offering.
Subscribe to our channels. If you have comments or questions or if there’s a topic that you guys want to know more about, please post those. We’d be happy to review those and talk about something else in the future.
I think next week our focus is going to be on some typical mistakes that are made when e-filing. Um, small things like choosing the right type of exempt status or the schedules that you need, things like that. So, we’ll dive into that a little bit more next week.
But thank you guys for checking us out this week. We’ve got a couple of other videos from previous weeks as well, so check those out and reach out to us.