IRS to offer way for small charities to keep tax-exempt status despite missing filing deadline

IRS offers reprieve for charities missing deadline

WASHINGTON — The Internal Revenue Service is offering a reprieve to more than 200,000 small charities that missed a tax filing deadline and are now in danger of losing their tax-exempt status.

A 2006 law required nonprofit organizations with receipts of less than $25,000 to file tax returns for the first time in 2007. If charities fail to file for three years, they lose their tax-exempt status. The law excludes churches.

Monday was the 2010 filing deadline, but IRS Commissioner Doug Shulman said his agency will issue guidance soon on how charities that missed the deadline can keep their tax-exempt status.

In the meantime, Shulman urged charities that missed the deadline to file as soon as possible.

“The guidance will offer relief to these small organizations and provide them with the opportunity to keep their critical tax-exempt status intact,” Shulman said in a statement Tuesday. “Filing a tax return for the small organizations is easier than you’d think. It just takes a few minutes to fill out the electronic notice Form 990-N.”

The IRS has sent notices to more than 600,000 small charities in the past three years, reminding them of the filing requirement. The agency is unsure how many of those charities are defunct or how many have simply failed to file.

But the Urban Institute’s National Center for Charitable Statistics, which conducts economic and social policy research, estimated last week that 214,000 nonprofit organizations hadn’t filed.

Charities losing their tax-exempt status would no longer be eligible to receive tax-deductible donations.

Online:

www.irs.gov