Private foundations must now file Form 4720 electronically

A reminder to private foundations to file Form 4720 electronically

A reminder to private foundations to file Form 4720 electronically

The IRS today issued a reminder to private foundations of the requirement for electronic filing of Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code.

As explained in an IRS transmittal message, a provision of the “Taxpayer First Act” requires certain exempt organizations to file information and tax returns electronically for tax years beginning after July 1, 2019—including private foundations filing Form 4720.

During the years when Form 4720 was being converted to an electronic format and when software was being developed, the IRS continued to accept paper versions of Form 4720 for the 2019 and 2020 tax years. Today’s release reports that the 2020 Form 4720 and its instructions have been updated for e-filing, and that in early June 2021, several providers have made software available to file Form 4720 electronically.

Accordingly, Form 4720 filed by a private foundation with a due date on or after July 15, 2021, must be filed electronically—and not on paper. The IRS noted that a limited exception applies for 2020 Form 4720 returns with a due date on or after July 15, 2021, when submitted on paper provided there is a postmark date on or before June 16, 2021.

The IRS concluded that organizations—other than private foundations—that are required to file Form 4720 are “encouraged” but not required to file Form 4720 electronically.

In other news

The IRS in the same message explained it was experiencing delays in processing paper returns, including Form 990‑EZ, Short Form Return of Organization Exempt from Income Tax, and Form 8868, Application for Extension of Time To File an Exempt Organization Return, and encouraged organizations to file these forms electronically.


For more information, contact a tax professional with KPMG’s Washington National Tax practice:

Ruth Madrigal | +1 202 533 8817 | ruthmadrigal@kpmg.com

Preston Quesenberry | +1 202 533 3985 | pquesenberry@kpmg.com

Carrie Garber Siegrist | +1 202 533 3056 | carriesiegrist@kpmg.com

 

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