Sunday, May 16, 2010

Thousands of non-profits could unwittingly lose tax status - Little League Team?

This law effects non-profits with less than $25,000 annual revenue which would include many of your local charities, Little League, Dragonboat, etc. It is just another example of Big Government making your life a little more difficult through regulation.

The 2006 Pension Protection Act included a provision requiring all non-profits to file an annual return with the IRS.

Previously, non-profits with annual revenue of less than $25,000 were excluded. Non-profits that fail to file a return for three consecutive years lose their tax-exempt status. On May 17, the three-year clock runs out for non-profits that haven't filed a return since 2007.

The Urban Institute estimates that up to 365,000 non-profits could lose their tax-exempt status if they fail to file by Monday. Groups that miss the deadline will have to apply for a new exemption and pay a user fee of up to $850. They could also be liable for taxes on any revenue earned before their exemption is renewed.
Read article here.

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