Monday, August 9, 2010

IRS Provides One Last Chance for Small Exempt Orgs That Failed to File a 990

Everyone has read the stories about thousands of small exempt organizations that could lose exempt status because of the failure to file a Form 990 (or more likely, the Electronic Notice Form 990-N or E-Postcard, which literally asks for only 8 items of information from charities with gross receipts of $25,000 or less).  The IRS has announced a program that gives these organizations one last chance to file, until October 15, 2010. The IRS also posted a list of the names and last know address of the organizations in danger of losing exemption because of their failure to file.

The filing requirement was part of the 2006 Pension Protection Act; prior to the PPA, small exempt organizations (e.g., those with annual gross receipts of $25,000 or less) were not required to file any kind of tax return.  The PPA included a provision requiring even these small exempt organizations to provide what I call a "notice of existence" to the IRS (the E-Postcard); if an organization fails to file its required return for three consecutive years, it will automatically lose its exempt status.


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Reminder that the "once-in-three sequential years failure-to-file 990-N (or other 990 series" revocation results will reach self-described exempts, a group that includes 501(c)(4)'s, <$5k-per-year 501(c)(3)'s, etc. The 10/15 due date (achieved by the IRS' extension that applies to calendar yearend organizations as well as groups with years ending Jan-Apr) thus need be observed by many groups who will NOT BE ON THE LIST. Questions on this can be addressed to me!

Posted by: Eve Borenstein | Aug 11, 2010 10:19:47 AM

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