Be Sure About Charity’s Status

As Stephanie Strom recently wrote in The New York Times (“One-Fourth of Nonprofits Are to Lose Tax Breaks“), it’s now more important to ever to be sure about the the tax-exempt status of charitable organizations before making a contribution.  Here’s the synopsis:

At midnight on May 15, an estimated one-fifth to one-quarter of some 1.6 million charities, trade associations and membership groups will lose their tax exemptions, thanks to a provision buried in a 2006 federal bill aimed at pension reform.

The federal legislation passed in 2006 required all nonprofits to file tax forms [Form 990] the following year. Previously, only organizations with revenues of $25,000 or more — or the vast majority of nonprofit groups — had to file.

The new law, embedded in the 393 pages of the Pension Protection Act of 2006, also directed the Internal Revenue Service to revoke the tax exemptions of groups that failed to file for three consecutive years. Three years have passed, and thus the deadline looms.

Confirming a charity’s tax-exempt status requires no more than a simple search on the IRS’s Publication 78 website.  Note that churches are not required to file annually to maintain their tax-exempt status.

What do you do if you’re a charity at risk to lose your tax-exempt status?  Check out the IRS’s FAQ and call your attorney fast.

Leave a Reply

 

This entry was posted on Tuesday, May 4th, 2010 at 7:30 am and is filed under Charitable Giving. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.