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September 21, 2022

Recent IRS penalty relief does not include Forms 990 and 990-EZ or encompass IRC Section 6652 penalties

  • The IRS’s recently granted penalty relief for many 2019 and 2020 returns applies to Forms 990-T and 990-PF but does not include relief for Forms 990, 990-EZ or 4720.
  • The relief provided in Notice 2022-36 pertains to penalties for failure to file tax returns or pay tax, but not the failure to file certain information returns.
  • Exempt organizations should file any past-due 2019 and 2020 Forms 990-T and 990-PF and pay any related taxes by the extended due date of September 30, 2022, to avoid certain penalties. But they should also note that the IRS has not extended this relief to other non-filed or late-filed tax-exempt forms.

The IRS's recent announcement (Notice 2022-36) of relief from failure-to-file and late-filing penalties for many 2019 and 2020 returns and taxes owed, if filed and paid by September 30, 2022, included some forms used by the tax-exempt organizations community but excluded others. Exempt organizations should also note that relief offered by the notice applies to penalties under IRC Section 6651, Failure to file tax return or to pay tax, but not IRC Section 6652, Failure to file certain information returns, registration statements, etc.

Notice 2022-36

Notice 2022-36 gives taxpayers that have not filed certain 2019 and 2020 tax returns or paid related taxes until September 30, 2022, to file and pay the taxes due without incurring failure-to-file and failure-to-pay-tax penalties under IRC Section 6651. For affected returns, the IRS will automatically abate IRC Section 6651 penalties that it already assessed and refund or credit IRC Section 6651 penalties that were already paid. The notice explains that Treasury and the IRS granted the penalty relief to "allow the IRS to focus its resources more effectively, as well as provide relief to taxpayers impacted by the COVID-19 pandemic." (See Tax Alert 2022-1308.)

Notice 2022-36 provides IRC Section 6651 penalty abatement for non-filed or late-filed Forms 990-PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as Private Foundation, and Forms 990-T, Exempt Organization Business Income Tax Return (and proxy tax under section 6033(e)), that are filed on or before September 30, 2022. The notice does not provide relief for non-filing, late filing, or inaccurate filing of Forms 990, Return of Organization Exempt from Income Tax, Forms 990-EZ, Short Form Return of Organization Exempt from Income Tax, or Forms 4720, Return of Certain Excise Taxes under Chapters 41 and 42 of the Internal Revenue Code.


The IRS's announcement of this penalty abatement is welcome relief for many 990-T and 990-PF filers who experienced processing delays during the COVID-19 pandemic or were assessed penalties for late filing of these returns. These organizations should evaluate their previously late-filed Forms 990-T and 990-PF to determine eligibility for relief. If they have already paid IRC Section 6651 penalties for late-filing or late payment of tax, they should not need to contact the IRS to request abatement, as the notice indicates abatement will occur automatically. It is possible, but unlikely, that the IRS will extend similar relief to 2019 or 2020 Form 990, 990-EZ or 4720 filers. Accordingly, exempt organizations should file these returns as soon as possible to minimize penalties.

Although Notice 2022-36 provides relief for private foundations from IRC Section 6651 penalties for failure to timely file Form 990-PF or pay tax, it does not provide relief for IRC Section 6652 penalties for failure to timely file Form 990-series returns, including Form 990-PF. So even if a private foundation were to qualify for relief from IRC Section 6651 late filing and tax payment penalties (i.e., up to 25% of the tax due) by filing its 2019 or 2020 Form 990-PF by September 30, 2022, it could still be liable for IRC Section 6652 late-filing penalties (i.e., up to $105 per day for a maximum of $54,500 per return). Notice 2022-36 does not address this distinction between IRC Section 6651 and 6652 penalties or possible relief from IRC Section 6652 penalties.



— For more information about EY's Exempt Organization Tax Services group, visit us here.


Contact Information
For additional information concerning this Alert, please contact:
Exempt Organization Tax Services
   • Stephen Clarke (
   • Melanie McPeak (
   • Kristen Farr Capizzi (
   • Cal Hoke (