(New York Times) Buried somewhere in the 393 pages of the Pension Protection Act of 2006 is a troubling future for some 400,000 nonprofits. Effective May 16, one-fifth to one-quarter of about 1.6 million charities, trade associations, and membership groups will lose their tax-exempt status due to a federal provision made in 2006, mandating that all nonprofits file taxes the following year. Before the 2006 provision, only nonprofits with a revenue exceeding $25,000 had to file. The law also required the IRS to revoke tax exempt status to organizations who neglected to file for three years in a row, and on May 16, the time has come. Fortunately, the IRS does not wish to revoke tax-exemption, and 665,000 letters informing nonprofit groups who had not filed or who had below $25,000 were sent in 2007. Not surprisingly, the smallest nonprofit groups are the ones expected to be affected most, but the IRS is willing to give them time to meet the terms of the law.
%d bloggers like this: