Important Notice
Important Alert for All Nonprofit and Tax Exempt Organizations
We would like to make all nonprofit and tax
exempt organizations aware of a very significant change in the
law that will affect almost all nonprofit and tax exempt organizations
and which is now a matter of urgency for many
organizations.
Any nonprofit or tax exempt organization (except churches and religious organizations) that does not file a 990 Return for 3 consecutive years will automatically lose its tax exemption. The requirement went into effect in the 2007 tax year and 2010 is the first year that organizations who have failed to file will have their exempt status revoked. The new law includes small organizations with gross receipts of less than $25,000 per year. In the past, those organizations did not have to file a return, but since 2007 they have been required to complete form 990-n annually in the form of an electronic postcard. For organizations that have tax exemption through a group ruling, if their parent organization has failed to file and loses its tax exemption, then the group exemption is lost also.
The automatic revocation occurs on the filing due date of the 3rd consecutive year that an organization has failed to file. Tax exempt organizations are required to file on the 15th day of the 5th month after their tax year ends. So, for organizations whose tax year is the same as the calendar year, their 2009 Return will be due on May 15, 2010. Any organization that has their tax exempt status revoked will have to reapply to the IRS for recognition of tax exemption.
The IRS estimates that up to 400,000 tax exempt organizations, or roughly a quarter of all tax exempt organizations, will lose their exempt status on May 15th of this year.
Hopefully you are already aware of this change in the law, but if you know that your organization has not filed any type of 990 Return in the last few years, or you have any concerns about your tax exempt status, please contact us and we will be glad to help you get back into compliance with the IRS. Please feel free to pass this information along to any other organization that may be affected.