Small New York nonprofit organizations which are at risk of losing their tax-exempt status because they failed to file required returns for 2007, 2008 and 2009 can preserve their status by filing returns by Oct. 15, 2010, under a one-time relief program.
The IRS posted a special page listing the names and last-known addresses of these at-risk nonprofits, along with guidance on how to come back into compliance.
Two types of relief are available for small tax exempt organizations — a filing extension for the smallest organizations required to file Form 990-N, Electronic Notice (e-Postcard) , and a voluntary compliance program (VCP) for small organizations eligible to file Form 990-EZ, Short Form Return of Organization Exempt From Income Tax.
Small New York nonprofit organizations required to file Form 990-N can simply go to the IRS website, supply the eight information items asked for on the form, and electronically file it by Oct. 15.
Tax-exempt organizations eligible to file Form 990-EZ must file their delinquent annual information returns by Oct. 15 and pay a compliance fee. This relief is not available to larger New York nonprofits required to file the Form 990 or to private foundations that file the Form 990-PF.
Nonprofits that have not filed the required information returns by October 15 will have their tax-exempt status revoked. Donors who contribute to at-risk organizations are protected until the final revocation list is published.
The Pension Protection Act of 2006 made two important changes affecting tax-exempt organizations, effective the beginning of 2007. First, it mandated that all tax-exempt organizations, other than churches and church-related organizations, must file an annual return with the IRS.
The Form 990-N was created for small tax-exempt organizations that had not previously had a filing filing requirement. Second, the law also required that any tax-exempt organization that fails to file for three consecutive years automatically loses its federal tax-exempt status.
If you manage a non profit in New York and need professional, yet affordable legal assistance, please see my website at New York Non Profit Attorney or call my offices at 585-484-7432 or 800-729-4571 if the call is long distance.