Thursday, August 19, 2010
Non-ProfitsThe IRS recently released an updated List of Organizations
that are not compliant with filing an Annual Return of Exempt Organizations with the Internal Revenue Service.
Pursuant to IRS requirements listed in the Pension Protection Act of 2006, 501c organizations are required to file
an Annual Return of Exempt Organizations, referred to as Form 990, by the 15th of the 5th month after the closing of the fiscal
year. The failure to submit this form for three consecutive years has resulted in the revocation of these
organizations 501c status.
Implications to the loss of the Tax Exempt Status by Non-Profits
may include –s
The Non-Profit may have to pay taxes
on surplus revenues.s
The Non-Profit may have to pay taxes
on Capital Gains on Investments.s The Non-Profit may have to pay taxes on owned Real Estate.s The Non-Profit may have to pay sales tax on goods and services
purchased.s
By having to pay taxes, Non-Profits
have reduced revenues to support their mission.s The Non-Profit may lose grants and donations because of donor restriction to only provide funding to 501c3
organizations.s
Donations made by donors may not be
tax deductible. Organizations that have had their Tax Exempt Status revoked must now file a Form 1024S
to regain their exempt status. If you are involved with any Non-Profit organizations, now would be
a good time to ensure that their tax exempt status is in force. Please feel free to contact Schooner Group to see if a Non-Profit you know of is on the current list. We have assisted several Non-Profits
complete and submit the Form 1024S and develop processes to file Forms 990N and Form 990 to comply with this annual IRS requirement.
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