Small Charities May Have Suffered Setback

As of midnight, Monday, May 17, many charities with annual revenue below $25,000 may have lost their tax-exempt status.

An IRS news release states:

The Pension Protection Act of 2006 mandates that all non-profit organizations, other than churches and church related organizations, must file an information form with the IRS.  This requirement has been in effect since the beginning of 2007, which made 2009 the third consecutive year under the new law. Any organization that fails to file for three consecutive years automatically loses its federal tax-exempt status.

Clicking through the IRS Web site, it seems that the deadline might be somewhat “elastic,” as the electronic form states “During this peak filing time (May 16 through May 18), it might take up to 48 hours to receive your e-filing receipt.”

So, if your organization raises less than $25,000 annually, and you have not filed in the past three years, get to IRS Web site and file the e-Postcard right away. Make sure you don’t put your tax-exempt status at risk.