Nonprofit Corporations Archives - Page 4 of 7

IRS Will Give Relief to Tax Exempt Organizations that Missed the May 17, 2010, Tax Return Filing Deadline

Tax exempt organizations that earned less than $25,000 of annual income where not previously required to file a tax return with the IRS. The tax law changed and all tax exempt organizations, including those with incomes less than $25,000 were required to file an IRS form 990 by May 17, 2010, or risk losing their tax exempt status. Now, the IRS Commissioner posted a notice on the IRS website that says the IRS will provide guidance to organizations that missed the deadline. Here’s the Statement of IRS Commissioner Doug Shulman on the Filing Deadline for Small Charities:

Now that the May 17 filing deadline has passed, it appears that many small tax-exempt organizations have not filed the required information return in time. These organizations are vital to communities across the United States, and I understand their concerns about possibly losing their tax-exempt status.

The IRS has conducted an unprecedented outreach effort in the tax-exempt sector on the 2006 law’s new filing requirements, but many of these smaller organizations are just now learning of the May 17 deadline. I want to reassure these small organizations that the IRS will do what it can to help them avoid losing their tax-exempt status.

The IRS will be providing additional guidance in the near future on how it will help these organizations maintain their important tax-exempt status — even if they missed the May 17 deadline. The guidance will offer relief to these small organizations and provide them with the opportunity to keep their critical tax-exempt status intact.

So I urge these organizations to go ahead and file — even though the May 17 deadline has passed.

Filing a tax return for the small organizations is easier than you’d think. It just takes a few minutes to fill out the electronic notice Form 990-N (e-Postcard). This is available for small tax-exempt organizations with annual receipts of $25,000 or less.

Related Information:

For access to the e-Postcard and further details, see Annual Electronic Filing Requirement for Small Exempt Organizations, Form 990-N (e-Postcard).

Hundreds of Thousands of Nonprofits May Lose Tax Exemptions for Failing to File Tax Returns

May 17, 2010, is the deadline for nonprofit corporations that are tax exempt organizations (other than churches) with less than $25,000 in income to file IRS form 990-N. A change in the law three years ago become effective on May 17th. See “Thousands of nonprofits may lose tax-exempt status” and “Thousands of non-profits could unwittingly lose tax status.”

See the article in the Nonprofit Law Blog called “The End of Small Nonprofits That Have Not Filed Form 990.”

Prepare Your Own 501(c)(3) Tax Exempt Organization Application

I form a lot of Arizona nonprofit corporations. Some are tax exempt charities and some are not. A nonprofit corporation formed under Arizona law does not automatically qualify as a charity that is exempt from federal income tax. Nonprofit corporations that want to be tax exempt organizations must file an IRS form 1023 and receive approval from the IRS.

IRS form 1023 is not for the faint of heart. For those who want to prepare the form 1023 themselves rather than hire a professional, I recommend an excellent how-to book called “Prepare Your Own 501(c)(3) Application” by former IRS agent Sandy Deja. Sandy’s resume is impressive:

She has worked with form 1023 almost daily since 1974
She reviewed about three thousand exemption applications during her 12 years as an IRS Exempt Organizations Specialist
She has prepared over one thousand forms 1023, and reviewed almost that many prepared by others since leaving the IRS

If you want a professional to assist in preparing IRS form 1023, call me, Arizona nonprofit and charitable organization attorney Richard Keyt at 602-906-4953, ext. 1 or call Richard C. Keyt, CPA, at 602-906-4963, ext. 3. We do not charge to answer questions about forming nonprofit corporations or applying for tax exempt status with the IRS. See my article called “Hire Us to Get an IRS Tax Exemption for a Charitable Organization.” We can prepare and file an IRS Form 1023 for a charity formed in any of the fifty states.

For more about nonprofits and charities go to my website called Nonprofit Corporations.

One-Fourth of Nonprofits Are to Lose Tax Breaks

New York Times: “At midnight on May 15, an estimated one-fifth to one-quarter of some 1.6 million charities . . . will lose their tax exemptions . . . . federal legislation passed in 2006 required all nonprofits to file tax forms the following year. Previously, only organizations with revenues of $25,000 or more . . . had to file.”

See IR-2010-10, The IRS Reminds Tax-Exempt Organizations of All Sizes to File the Form 990 on Time to Preserve Their Tax Exempt Status, IRS, Annual Electronic Filing Requirement for Small Exempt Organizations — Form 990-N (e-Postcard) and a story in the Chronicle of Philanthropy “Up to 25% of Nonprofit Groups Could Soon Lose Charity Status.”

Nonprofit Corporation Legal Audit

Nonprofit Law Blog: “All too often, the issue of legal compliance receives attention from a nonprofit corporation only after a conflict arises. Instead, a nonprofit corporation can better prevent conflicts and protect itself through regular legal audits. Financial audits alone, while important, will not sufficiently account for the bigger issue of overall compliance with state and federal laws. A legal audit will include a wide range information-gathering, such as:”

Previous 345 Next