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Tax Exemptions in Danger – Check Your 990 Filing Now
In May 2010, half a million nonprofit organization are at risk of losing their tax exempt status. The IRS estimates that is the number of nonprofits that have failed to file form 990-N.

The Pension Protection Act of 2006 mandates that tax exempt organizations that don’t meet the income threshold for Form 990 or 990-EZ must file the new 990-N with the IRS, for years ending on or after December 31, 2007. This same act requires the IRS to revoke the tax-exempt status of any organization that fails to file the required 990 form for three consecutive years. Revocations will happen automatically beginning May 2010.

This means that eight months from now, hundreds of thousands of charitable organizations will no longer be able to accept tax-deductible contributions. It also means that these organizations will find themselves required to pay federal income taxes – and be subject to financial penalties for failing to do so. 

Excerpted from “Half a Million Nonprofits Could Lose Their Tax Exemptions,” by Suzanne E. Coffman, January 2009, GuideStar USA, Inc. ( www.guidestar.org )