Extension of time to file for those in federally declared disaster areas
May 15 is the due date for filing Form 990-series returns for calendar-year tax-exempt organizations, however some may have more time to file. Exempt organizations in federally declared disaster areas have until June 17, 2024, to file.
Electronic filing requirements
The Department of the Treasury and the Internal Revenue Service have updated the electronic filing regulations.
- New Threshold for Electronic Filing: The threshold for mandatory electronic filing has been lowered from 250 returns to just 10 returns in a calendar year. This change means more filers will need to submit their returns electronically.
- Aggregation of Returns: To determine if you meet the new 10-return threshold, you must now combine all types of information returns you file, such as Forms W-2, 1099, income tax returns, employment tax returns, excise tax returns, Form 5500, etc.
- Effective Dates: The new electronic filing requirement applies to information returns filed for tax year 2023 and onwards. Specifically, if you file 10 or more information returns, including Forms W-2, during a calendar year, you are required to file them electronically starting with the returns due in January 2024.
Importance of Correctly Classifying Workers: Employee vs. Independent Contractor
Understanding the distinction between employees and independent contractors is crucial, primarily because it influences how payments are treated for tax purposes. This classification remains a key focus of IRS scrutiny as part of their 2024 compliance program and priorities. Correct classification affects tax obligations, compliance with labor laws, and eligibility for employee benefits.
Here’s how you can determine the correct classification:
- Behavioral Control: Assess whether you control, or have the right to control, what the worker does and how they perform their tasks.
- Financial Control: Consider if you control the financial aspects of the worker’s job. This includes how the worker is paid, whether expenses are reimbursed, and who provides tools and supplies.
- Type of Relationship: Look at the presence of contracts, employee benefits like insurance or vacation pay, the permanence of the relationship, and whether the work is a key aspect of the business.
- Overall Assessment: No single factor determines the classification; instead, evaluate the entire relationship, focusing on the extent of control you have over the worker. Document each aspect of your determination process.
- Formal Determination: If unsure, you can request a formal determination from the IRS by filing Form SS-8.
IRS updates process for requesting copies of exempt organization documents
If you need information about a tax-exempt organization, the IRS provides several tools and processes:
Tax Exempt Organization Search (TEOS): This tool on the IRS website is the main resource for accessing publicly available data on Forms 990 filed electronically. TEOS also lets users view determination letters that have been issued since January 1, 2014.
Requesting Additional Information: For other details related to tax-exempt organizations, you can use Form 4506-A or the revised Form 4506-B. The updated Form 4506-B streamlines the process, ensuring that requests are handled more efficiently and consistently.
More from This Series
Part I: Accounting and Auditing Update | Summer 2024
Part III: Government Auditing Standards Update | Summer 2024
Part IV: Expert Insights | Summer 2024
