Tax form deadline surprises nonprofits
More than 200,000 small nonprofits could lose their tax-exempt status if they don't file a form with the IRS by the end of today. The IRS is changing the rules for these organizations so it can keep better track of them. Nancy Marshall Genzer reports.
by Nancy Marshall Genzer
Small nonprofits that have less than $2,500 in revenues never needed to file tax forms. But Congress changed that in 2006. And nonprofits that haven’t filed by today will lose their tax-exempt status. That’s news to many groups.
“No one had heard of this,” says Brent Volf, executive director of a youth choir in Great Falls, Mont.
Volf says he didn’t have a clue about the deadline. When he found out, he panicked.
“I was urgently trying to communicate with people to figure out what I had to do,” says Volf. “Because I knew it had to be done.”
Turns out, all Volf had to do was fill out a form on the Internet. But nonprofits like Little League teams and PTAs still haven’t gotten the message.
“It’s clearly going to cause some pain for little nonprofit organizations that didn’t have current addresses on file with the IRS and never got the word that they were required to file,” says Tom Pollak, a senior research associate with the Urban Institute.
Organizations that lose their tax exempt status can reapply for it. But that’s time consuming and expensive.