Tuesday, June 14, 2011

IRS Ends Exemption for 275,000 Nonprofits

The Internal Revenue Service (IRS) has been very vocal about the fact that they intended to revoke the tax exemption for any nonprofit organization if they didn't meet legal requirements to file annual tax forms.

The IRS was true to their word.

Over 275,000 nonprofit organizations were placed on the agency's Automatic Revocation of Exemption List last month. [SOURCE]

The Urban Institute’s National Center for Charitable Statistics analyzed the list of delinquent nonprofit filers that the IRS released last year. Roughly 90 percent of them had never filed a tax return suggesting that they had never raised $25,000 in a year.

About one-quarter of them got tax exemptions before 1980 and may have gone out of business without telling the IRS.

The nonprofit sector was reduced about 17% by this action ... there are now about 1.3 million charities, trade associations, membership groups and labor unions.

The IRS isn’t done trimming its list of officially registered nonprofits. Moving forward, the tax agency plans every month to release the names of groups that fail to file their paperwork.

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