Thousands of Non-profits Risk Losing Tax-free Status as Deadline Looms

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October 15 is the deadline for non-profts in the country with revenues of less than $25,000 a year to fle Form 990-N to the IRS to keep their tax exemption status. The consequences of losing tax exempt status are clear. All forms of income including donations and gifts to the organization will be subject to tax and all contributors of such donations and gifts will not be able to deduct their contributions from their taxable income. All non-proft organizations that have not fled Form 990-N for the last 3 consecutive years will have their tax-free status revoked come October 15.

Once tax exempt status is revoked, an organization would have to re-apply to reinstate the exemption. But this process would take time and incur expenses which many non-profits may not be able to bear. In the meantime, the organizations would have to pay taxes for the period between the time of revocation of exemption to the time of its reinstatement.

Please see full article below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Darrin Mish, Tampa Tax Attorney, The Law Offices of Darrin Mish, P.A. | Attorney Advertising

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