08/26/2010

Nonprofit Tax Exempt Alert: At Risk Tax-Exempts Have Until October 15 to Preserve Status

The IRS announced in late July that small nonprofit organizations at risk of losing their tax exempt status due to not filing with the IRS for three consecutive years have two options under a special program:

Those organizations having sufficient gross receipts to require filing an annual return must file Form 990 EZ under a voluntary compliance program and pay a compliance fee to retain their exempt status.
Those organizations not required to file an income tax return must file a Form 990N electronically in order to retain their exempt status. Form 990N is an eight-question electronic postcard.

The above options must be exercised by October 15, 2010. These options do not apply to those organizations required to file the regular version of Form 990 or to private foundations that file Form 990 PF. Tax exempt organizations should click here for additional information.

The IRS also published a list of organizations at risk of losing their tax exempt status along with guidance as to how to return to compliance. The listed organizations are those that have return due dates from May 15, 2010, and October 15, 2010, for which the IRS has no record of having received an income tax return for three years.

The Pension Protection Act of 2006 enacted changes that require tax exempt organizations to file documents with the IRS in order to retain their tax exempt status. The original due date for such filings, May 15, 2010, has been extended after many organizations complained they had not been advised of the need for them to contact the IRS.

See the related content on the Nonprofit Tax Exempt page of our website for previous alerts about this requirement. For additional information on this alert, contact Wayne Henry at 402.930.1742 or Charley Jensen at 816.691.2760.