Individuals and businesses are not the only ones that can receive a tax extension from the IRS. After all, there are other types of organizations that could benefit from filing a tax extension. Non-Profit and Exempt Organizations can also file tax extensions with the IRS by Filing Form 8868. Unlike the process of filing a personal or business tax return, the Form 8868 can be extended twice.
The deadline to file an Exempt Organization is May 16, 2016 for the organization filing for a calendar tax year. For organizations not filing on a calendar tax year basis, the due date is the 15th day of the 5th month after their tax year end date.
The First Extension is an automatic 3-month extension of time to file. Unless a Non-Profit Organization files a Form 990-T, the first part will only extend the deadline by 3 months. (Automatic 6-month extension will be given for form 990-T)
The Second Extension is an additional not-automatic 3-month tax extension. This additional extension can only be filed if the organization has already been granted the automatic 3-month extension.
The easiest and safest way to file this form is by filing through www.expressextension.com. The Internal Revenue Service prefers the E-File method and has often referred to it as "Safer than paper filing." Some people believe that the IRS may soon require that all documents and forms be e-filed.
These three Categories can file form 8868
Public charities is a kind of organization which has the broad support from public. These organizations mainly focuses on funds from the general public and these funds are tax deductable.
Private Foundation is formed by an individual or a group of individual. Nonexempt charitable trusts is considered as the private foundations which also have a wide support from the public.
Hospitals, Schools, Political organizations, Parent Teacher Associations are the other nonprofit organizations which operates independently and must report to the IRS.
E-filing is a paperless, online option provided by third-party vendors for the IRS Form 8868. The IRS recommends e-filing due to the quick response time of the IRS system and the substantial decrease in user errors.
An organization does not need to register as an e-filer with the IRS provided that they are using an IRS-Authorized e-filing service provider, such as ExpressExtension. Once the form has been submitted to the IRS, the organization should receive a response in around 15 minutes. Since the process is online, the filer may submit forms at their leisure and without wasting precious time and money.
All non-profit Forms 990 can be extended by Form 8868. This includes, but is not limited to, 990-EZ, and 990 etc.., The filer will select on the extension form what type of tax-exempt organization they are filing for, along with general information about the organization.
Generally, a penalty of ½ of 1% of any tax not paid by the due date is charged for each month or part of a month that the tax remains unpaid. The penalty cannot exceed 25% of the amount due. The penalty will not be charged if you can show reasonable cause for not paying on time.
A penalty is charged if the return is filed after the due date (including extensions) unless you can show reasonable cause for not filing on time. The penalty is 5% of the tax not paid by the regular due date for each month or part of a month that the return is late, up to a maximum of 25% of the unpaid tax. For an income tax return filed more than 60 days late, the minimum penalty is $100 or the balance of the tax due on the return, whichever is smaller.