July 2010

IRS extends filing deadline for small charities to Oct. 15

From USAToday.com.

The IRS will provide a reprieve for thousands of non-profit soup kitchens, amateur sports leagues and veterans organizations that missed a May 17 deadline to file an annual return with the government or lose their tax-exempt status.

The IRS new filing deadline for the non-profits is Oct. 15, IRS Commissioner Douglas Shulman said Monday.

The 2006 Pension Protection Act included a provision requiring all non-profits, except churches and church-related groups, to file an annual return with the IRS. Previously, non-profits with annual revenue of less than $25,000 were excluded from the requirement.

Under the law, any organization that fails to file a return for three consecutive years will have its tax-exempt status revoked. On May 17, the three-year clock ran out for many non-profits that haven't filed a return since 2007.

Once a charity or non-profit loses its tax-exempt status, it must apply for a new exemption and pay a user fee of up to $850. The organization could also be liable for taxes on any revenue earned before the exemption is renewed. In early 2011, the IRS plans to publish a list of charities and non-profits that have lost their tax-exempt status. Once the notice is published, donations to those organizations will no longer be tax-deductible.

Full article.