Exempt Organizations e-File: Failure to Comply with Electronic Filing Requirement
What happens if a tax-exempt organization required to e-File fails to comply with the requirement to file electronically?
Tax-exempt organizations that are required to file electronically but do not are deemed to have failed to file the return. This is true even if a paper return is submitted. For organizations with gross receipts exceeding $1 million, the penalty for non-filing is $100 for each day the failure continues, up to a maximum of $50,000 per return. The penalty begins on the due date of the return.
In addition, the person responsible for non-filing will be charged a penalty of $10 a day up to a maximum of $5,000, unless he or she shows that not complying was due to reasonable cause.