SKC Caution: Over 320,00 nonprofits are at risk of Losing Their Tax Exempt Status on Oct 15, 2010 - and most of them are totally unaware of it. Find out if you are at risk - then what your mandate is - and finally what you can do about it. The Pension Protection Act of 2006 made two important changes affecting tax-exempt organizations, effective the beginning of 2007. First, it mandated that all tax-exempt organizations, other than churches and church-related organizations, must file an annual return with the IRS. The Form 990-N was created for small tax-exempt organizations that had not previously had a filing requirement. Second, the law also required that any tax-exempt organization that fails to file for three consecutive years automatically loses its federal tax-exempt status. The IRS conducted an extensive outreach effort about this new legal requirement but, even so, many organizations have not filed returns on time.
If an organization loses its exemption, it will have to reapply with the IRS to regain its tax-exempt status. Any income received between the revocation date and renewed exemption may be taxable. Donations for charitable giving by donees will eventually become at risk of disallowance upon publication of updated lists. Click here for background video.
Here is the action Nonprofits should take:
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First - Find out if you are on the list of at risk nonprofits |
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Second - See the table below for your filing mandate |
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Third - Come into compliance. |
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Action:
Organizations eligible to efile Form 990N must do so by Oct 15, 2010 - No exceptions. There is a self service website for this here for those who wish to do this for themselves. It is free of charge.
Organizations who may be behind on other filings can prepare their 990 and pay the IRS a "compliance fee" to bring their status current.
Here are the Current Filing Guidelines
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