The Return of the Killer Klowns from Outer Space in 3D was a cancelled sequel to the 1988 film that was slated to be directed, produced and written by the Chiodo Brothers. Stephen Chiodo in particular had tried to make a sequel for many years but it never got off the ground as every network he went to turned down the chance to materialize his project. He stated he's been trying to create a sequel ever since he completed work on the first movie. The sequel was stuck in development hell.
Background on its development
In October 2018, SyFy was in talks to produce a sequel but the talks failed as they couldn't acquire the rights as in November 2019, it turns out 20th Century Fox secretly bought the rights to the film and refused to sell it to SyFy. 20th Century Fox intended on creating the sequel, but its acquisition by the Disney Company blocked Fox's involvement in the project since Disney refused to let Fox create a Killer Klowns movie.
So can a sequel ever happen?
It's very unlikely that a sequel will ever happen at all.