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Nonprofit Status Revocation – Deadline October 15!

Most readers of this newsletter are probably well aware that the IRS has changed reporting requirements for nonprofit organizations, including new requirements for small organizations (budgets under $5,000) to file an annual 990-N report. I was startled when I read in a recent report by Guidestar that as of July 2010, over 355,000 nonprofits (over a quarter of those required to file) had failed to do so! The price of not filing? Revocation of nonprofit status. The implications of that revocation fall on donors, who would lose the ability to deduct their donations, and the organization itself, which would be required to pay income taxes.

Why do we care? Grassroots nonprofit organizations are doing important work in communities across the country. In volunteering for my community in the past, I have worked with small-budget parent-teacher organizations that had not filed annual reports with the state. It wasn’t that the forms were difficult to complete- they simply were not aware of the requirement. The amount of money these organizations raise makes a difference to the schools they serve, and the fact that contributions are deductible matters to the folks contributing. Anyone who alerts his or her friends, neighbors, or community organizations of the new filing requirement could save the nonprofit status for a small organization doing important work.

Guidestar’s report provides support, encouragement, and advice for those who have not yet filed. It also points to the added responsibility of donors to verify that nonprofits are in fact complying with these regulations. Additionally, the IRS provides a list of organizations (by state) that are delinquent and at risk of losing their nonprofit status, as well as information on what an organization can do to preserve its nonprofit status.

Please share this with any organization you may know that is at risk! The deadline for filing is October 15, 2010.


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