How to File Form 990-PF Electronically?
Understand the complete electronic filing process for Form 990-PF, from initial preparation to final IRS confirmation, ensuring your foundation's compliance.
Form 990-PF, Return of Private Foundation, is the annual information return used by private foundations in the United States. These organizations file the form with the IRS to report on their financial activities, charitable distributions, and adherence to tax regulations. The information provided offers transparency into the foundation’s operations, allowing the IRS to verify that the organization meets the requirements for its tax-exempt status. It details the foundation’s revenue, expenses, assets, and liabilities.
The form also serves as a public record, disclosing details about the foundation’s governance structure and listing the grants it has awarded. This public information includes recipient names, their locations, and the specific grant amounts provided.
The Mandatory Electronic Filing Requirement
The method for submitting Form 990-PF has shifted from a paper-based system to a required digital one. Under the Taxpayer First Act of 2019, electronic filing is now mandatory for nearly all private foundations for tax years beginning after July 1, 2019. Consequently, foundations can no longer simply print and mail their annual returns to the IRS.
This mandate was implemented to improve the efficiency of tax administration and to increase the public availability of data from exempt organizations. The law requires that information from these electronically filed returns be made available in a machine-readable format. While there are very limited exceptions, the e-filing rule affects all private foundations, regardless of their asset size. This includes exempt and taxable private foundations and nonexempt charitable trusts treated as private foundations.
Information and Documents Needed for Filing
Before beginning the electronic filing process, a foundation must gather specific financial data and documentation. A primary requirement is the organization’s Employer Identification Number (EIN). You will also need:
- Detailed financial statements for the reporting period, including a comprehensive balance sheet listing all assets, liabilities, and net assets, and a statement of revenue and expenses.
- A detailed report of all grants and contributions made during the year, including the recipient’s name, full address, and the exact dollar amount awarded for each grant.
- A complete list of its officers, directors, trustees, and foundation managers, reporting each individual’s name, address, title, average hours per week, and any compensation paid.
- The specific figures required to calculate the excise tax on net investment income, which involves separating investment-related income and expenses from other financial activities.
Choosing an IRS-Authorized E-File Provider
Private foundations cannot file Form 990-PF directly through the IRS website. Instead, they are required to use third-party software that has been approved by the IRS for this purpose. The IRS maintains a list of “Authorized IRS e-file Providers for Form 990” on its official website, which is the source for finding software that meets the agency’s security protocols.
When selecting a provider, foundations should consider several factors. Cost is a consideration, as pricing can range from free options to paid subscriptions. User-friendliness is another aspect, as some software is designed for individuals without an accounting background and offers step-by-step guidance. Another factor is whether the software also supports required state-level filings, as many states have their own separate registration and reporting requirements.
The Electronic Filing Process
Once an e-file provider is selected, the filing process begins by creating an account with the software provider. You will then navigate the software’s interface to enter the foundation’s data into a digital version of Form 990-PF, broken down into its various parts and schedules. You will proceed section by section, inputting the previously collected information.
Most software includes validation checks to help identify missing information or potential inconsistencies before you can move forward. After all data has been entered, the software will generate a completed Form 990-PF for review. Carefully examine this entire document to ensure all figures are correct before electronically signing and authorizing the return for transmission. The software then securely sends the completed form directly to the IRS.
Post-Filing Requirements and Confirmations
After transmitting the Form 990-PF, the foundation should monitor for an electronic acknowledgement from the IRS, which is relayed back through the e-file provider. It is important to distinguish between a “Submitted” status and an “Accepted” status. “Submitted” means the return has been sent, while “Accepted” confirms the IRS has received it and it passed initial processing checks.
If the return is rejected, the IRS will provide a reason, often related to an error like an incorrect Employer Identification Number (EIN). The foundation must correct the specified error within the e-filing software and re-transmit the return.
Fulfilling the federal filing requirement does not automatically satisfy any obligations at the state level. Private foundations must separately determine the reporting requirements of the state in which they are registered or operate. This often involves filing a copy of the Form 990-PF with a state agency.