IN THE NICK OF TIME
The IRS is granting a brief one-time reprieve to small nonprofit organizations at risk of losing their federal tax-exempt status.
The Pension Protection Act of 2006 mandated that any 501(c)(3) public charity, other than churches and church-related organizations, that failed to file a required Form 990 for three consecutive years would automatically lose their tax-exemption. (Before 2007, it wasn’t necessary for nonprofit organizations with under $25,000 in annual revenue to file.) The three years are now up and some groups are currently not in compliance.
The Pension Protection Act of 2006 mandated that any 501(c)(3) public charity, other than churches and church-related organizations, that failed to file a required Form 990 for three consecutive years would automatically lose their tax-exemption. (Before 2007, it wasn’t necessary for nonprofit organizations with under $25,000 in annual revenue to file.) The three years are now up and some groups are currently not in compliance.
Two types of relief are available for small exempt organizations — a filing extension for the smallest organizations required to file Form 990-N, Electronic Notice (e-Postcard) , and a voluntary compliance program (VCP) for small organizations eligible to file Form 990-EZ, Short Form Return of Organization Exempt From Income Tax.Small organizations required to file Form 990-N can go to the IRS website, supply eight information items called for on a form, and electronically file it by October 15 to be back in compliance.Under the VCP, tax-exempt organizations eligible to file Form 990-EZ must file their delinquent annual information returns by Oct. 15 and pay a compliance fee. Details about the VCP are on the IRS website, along with frequently asked questions.
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