Nonprofit Groups Need to File Tax Status
by Amos Goodall
Small nonprofit organizations, including those serving senior citizens, now may have to file an annual notice with the IRS to maintain their nonprofit status.
The Pennsylvania Corporation Bureau also has certain annual filing requirements for nonprofit corporations and decennial, or once every 10 years, requirements for all corporations. The new filing is called Form 990-N, "Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 9901 or 990-EZ."
Previously, tax-exempt organizations with gross receipts of $25,000 or less were not required to submit information returns. The first e-postcards are due in 2008. The IRS intends to have an option available for free electronic submission of the e-postcard.
This filing requirement does not apply to churches, their auxiliaries, or conventions and associations of churches. Also, organizations that are subordinates of a preant organization included on the parent's gorup return are not required to file Form 990-N.
Whether or not organizations receive information from the IRS, they risk losing their tax-exempt stats if they fial to comply.
Any organization that fails to meet its annual reporting requirement for three consectuive years will lose its tax-exempt status under the new law. An organization that wants to regain its exempt status will have to reapply for recognition as a tax-exempt organization, submit a new application and pay the review fee. Some organizations have been "grandfathered" out of compliance with current regualtions may lose this status, and donors whose contributions are received before the effectiveness of ruling on re-application may not be able to claim a tax deduction for their contributions.
The e-postcard requires small organizations to provide basic information and a statement confirming the organization's annual gross receipts are normally $25,000 or less.
If someone no longer associated with an organization received the IRS educational notice, he or she should call the IRS Customer Account Services at 877-829-5500.
Organizations that have not received the notice should contact the IRS for more information. The IRS has published a manual for charities for whom donations are deductible under Section 501(c)(3) at www.irs.gov/pub/irspdf/p4221pc.pdf.
Pennsylvania requires most nonprofit corporatiosn to file a formal notice before April 30 each year that there has been a change in the principal officers of the corporation. The state also requires all corporations that have not filed certain papers with the Corporation Bureau in a decade to file a decennial report. The next one will be due in 2011.