October 8th, 2010
October 15, 2010 is the final deadline for small tax exempt organizations to satisfy new filing requirements! Most tax-exempt organizations, also known as charitable organizations, must file a yearly return (Form 990) with the IRS. If an organization does not file as required for three consecutive years, the organization automatically loses its tax-exempt status. If an organization loses its exempt status, it must file income tax returns and pay income tax, and its contributors will not be able to deduct their donations. Until now, smaller organizations were not required to file.
Now, small tax-exempt organizations that never had to regularly file returns in the past—those with annual revenues of $25,000 or less – are at risk of losing their tax-exempt status because they failed to file required returns for 2007, 2008 and 2009. Under a one-time relief program, these organizations can preserve their status by filing returns by Oct. 15, 2010.
Two types of relief are available for small exempt organizations who have not filed in the past three years.
1. A filing extension for the smallest organizations required to file Form 990-N, Electronic Notice (e-Postcard). Small organizations required to file Form 990-N simply need to go to the IRS website, provide the eight information items called for on the form, and electronically file it by Oct. 15, 2010. That will bring them back into compliance.
2. A voluntary compliance program (VCP) for small organizations eligible to file Form 990-EZ, Short Form Return of Organization Exempt from Income Tax. Under the VCP, tax-exempt organizations eligible to file Form 990-EZ must file their delinquent annual information returns by Oct. 15, 2010 and pay a compliance fee.
For more information, please visit the IRS website.
If you have any questions on this or any other tax issue, or you would like to schedule a consultation with Attorney, Otto S. Shill, III please call (480)464-1111.
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