Some 24 small non-profit organizations in Campbell County could lose tax exempt status Monday because of an IRS law passed in 2006.
The law states that small tax-exempt organizations who get $25,000 or less a year are now required to file certain forms annually. The law also stipulates that if an organization doesn’t file for three consecutive years, it will automatically lose its tax-exempt status. That three-year deadline for most non-profits is Monday.
Local attorney R.T. Cox, who has helped many local non-profit organizations gain that status over the years, said many local charities have not heard about the law.
Cox heard about the issue Saturday and has been trying to get in touch with many of the non-profits. About half he has talked to so far have known about it. If a group’s tax-exempt status is revoked, it will have to go through all of the paperwork again to regain non-profit status, he said.
“It is a lot harder to get a tax-exempt classification than it was five years ago, so it would be very expensive and very burdensome for a lot of non-profits if they had to start over,” Cox said.
Even though this law passed in 2006, not a lot of effort has been made to inform non-profits of the change.
As Cox understands it, the IRS believes there are a lot of non-profit corporations that are either abusing the system or don’t exist anymore. Having them file would let the IRS know that they still exist.
The forms that must be filed — the 990-N form or an “e-Postcard” — are relatively quick and simple to fill out and can be done online.
The Urban Institute’s National Center for Charitable Statistics has established a website for people check to see if a specific group is in danger of losing its tax-exempt status. As of Thursday morning, 24 non-profit organizations in Campbell County were listed. The list is not absolute, but groups that are listed and want to retain non-profit status are urged to file or check with the IRS to see if the organization has met its filing requirements.
