IRS Update: Draft Form 990-T, Form 990-PF, and Form 990 Schedules, More COVID-19 Accommodations, and Waiting on Final Regs

It appears that a combination of the pervasive coronavirus fatigue and pressing tax matters in others areas has slowed down the flow of new IRS developments for tax-exempt organizations. That said, here are some recent items:

• Draft Form 990-T and Form 990 Schedules: The IRS has released an early release draft of the 2020 Form 990-T and the draft Schedule A for that form. While there are not draft instructions available yet, it appears that each filer will need to complete a separate schedule A for each separate trade or business, given the siloing requirement of Internal Revenue Code section 512(a)(6). Hat tip: EO Tax Journal. I also noticed that there are now draft versions of the 2020 Form 990-PF (with instructions) and most if not all of the 2020 schedules for the Form 990 available on the IRS Draft Tax Forms webpage.

• COVID-19 Accommodations: While the extended deadlines for Form 990 and many other filings have now expired, the IRS has put in place other, less broad pandemic-related accommodations. For example, Notice 2020-56 extends the deadlines for tax-exempt hospitals to conduct community health needs assessments and implement strategies to meet those needs, as requried by IRC section 501(r). The IRS also continues to follow modified procedures relating to exams, including information document requests. And under Revenue Procedure 2020-29, the IRS is generally allowing the electronic submission of requests for letter rulings, closing agreements, and other documents.

• Anticipating Final Regs: The Office of Management and Budget last week completed its review of the IRC section 4968 investment income tax final regulations (see proposed regulations and comments), so public release of those regulations is imminent. No reports yet on the status of the IRC section 4960 compensation tax final regulations (see proposed regulations and comments). But if you are bored, you can always take a look at the final regulations under IRC section 170 relating to the SALT deduction limit, which school choice groups report will hurt their ability to use state tax credit programs to stimulate fundraising.

Lloyd Mayer