Crucial Deadline Passes Concerning Non-Profit Filing

A crucial filing deadline passed on May 17 for tax-exempt organizations required by law to file Form 990 with the Internal Revenue Service. Those who did not meet the deadline run the risk of having their federal tax-exempt status revoked, said the IRS. The Pension Protection Act of 2006 mandates that all non-profit organizations, other than churches and church related organizations, file an information form with the IRS. The requirement has been in effect since the beginning of 2007, which made 2009 the third consecutive year under the law. Organizations that failed to file for three consecutive years automatically lose federal tax-exempt status. Form 990-series information returns are due on the 15th day of the fifth month after an organization’s fiscal year ends. May 15 fell on Saturday this year so the deadline was Monday, May 17. No grace period Organizations could have requested an extension by filing Form 8868 by the original due date. Without a prior request for extension, however, the IRS said there is no grace period. Under the law, the federal agency does not have discretion in the matter. “Our firm works with a lot of tax exempt organizations and we filed extensions if we didn’t get their information on time,” said Ron Chandler, partner at Miller, Kaplan, Arase & Co. in North Hollywood. Chandler does not anticipate that a large number of non-profits missed the deadline and run the risk of losing their tax exempt status. It takes a significant amount of not responding to IRS notices to accomplish such a feat, he said. But there may be some small organizations out there that have not been keeping up with their filings. In a statement on May 19, Douglas Shulman, commissioner of the IRS, urged small tax-exempt organizations that missed the deadline to file their required information as soon as possible, according to the California Association of Nonprofits. IRS help Shulman assured small organizations that the IRS will do what it can to help them avoid losing their exempt status. Small tax-exempt organizations with annual receipts of $25,000 or less can file an electronic notice Form 990-N (e-Postcard). Tax-exempts with annual receipts above $25,000 must file a Form 990 or 990-EZ, depending on their annual receipts. Private foundations file form 990-PF. A list of revoked organizations will be available to the public on IRS.gov. And organizations that lose exemption will have to reapply with the IRS to regain tax-exempt status. Any income received between the revocation date and renewed exemption may be taxable. For more information, see the Exempt Organizations: Status Revoked for not Filing Annual Returns or Notices page on the IRS.gov web site, or visit the ABC’s for Exempt Organizations page.