Notice 2022-36: Penalty relief regarding Forms 990-PF and 990-T for tax years 2019 and 2020 (COVID-19)
Relief from certain failure to file penalties with respect to tax returns for tax years 2019 and 2020 that are filed on or before September 30, 2022
Forms 990-PF and 990-T for tax years 2019 and 2020 (COVID-19)
The IRS today released Notice 2022-36 [PDF 130 KB] providing relief from certain failure to file penalties with respect to tax returns for tax years 2019 and 2020 that are filed on or before September 30, 2022, including Forms 990-PF and 990-T.
The IRS also today issued an accompanying release—IR-2022-155—further explaining the background to and reasons for the relief provided. According to the news release, in addition to providing relief for taxpayers affected by the coronavirus (COVID-19) pandemic, the relief provided by Notice 2022-36 “is designed to allow the IRS to focus its resources on processing backlogged tax returns and taxpayer correspondence to help return to normal operations for the 2023 filing season.”
Waiver and abatement of certain penalties
The IRS will not impose penalties with respect to certain specified tax returns for tax years 2019 and 2020 that are filed on or before September 30, 2022, including additions to tax under section 6651(a)(1) for failure to file the following income tax forms concerning exempt organizations:
- Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as Private Foundation
- Form 990-T, Exempt Organization Business Income Tax Return (and Proxy Tax Under Section 6033(e))
The notice also provides relief from certain information return penalties with respect to (1) tax year 2019 returns that were filed on or before August 1, 2020; and (2) tax year 2020 returns that were filed on or before August 1, 2021.
The notice provides that penalties will be automatically abated, refunded, or credited, as appropriate without any need for taxpayers to request this relief. The accompanying news release provides that taxpayers who have already paid eligible penalties will receive refunds or credits, and “many of the [refund] payments will be completed by the end of September.”
The penalty relief described in Notice 2022-36 does not apply to any penalties that are not specifically listed in the notice and is not available with respect to certain penalties or returns (for example, returns subject to penalties for fraud or penalties settled in an accepted offer in compromise or a closing agreement). Read TaxNewsFlash.
KPMG observation
Notice 2022-36 does not include in its relief provisions mention of section 6652 penalties for a failure to file Form 990, Return of Organization Exempt from Income Tax, or Form 990-EZ, Short Form Return of Organization Exempt from Income Tax. The notice also does not specifically mention relief from section 6651 penalties for failure to file Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code.
For more information, contact a tax professional with KPMG’s Washington National Tax practice:
Ruth Madrigal | ruthmadrigal@kpmg.com
Preston Quesenberry | pquesenberry@kpmg.com
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