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.

For Thousands of Nonprofits, May 15 Is the IRS Deadline to Worry About

Last year, GuideStar warned, "Half a Million Nonprofits Could Lose Their Tax Exemptions." This year, the number is down to 350,000 or 400,000, but the rest of the message is the same: hundreds of thousands of nonprofits are scheduled to lose tax-exempt status because they failed to file annual returns with the IRS.


The Pension Protection Act of 2006 requires the IRS to revoke the federal tax exemption of any organization that has failed to file three consecutive annual returns (Form 990-N, 990-EZ, 990, or 990-PF). Nonprofits that wish to have their exemptions reinstated will be required to re-apply to the IRS for tax-exempt status. This process can take several months.

Read the rest of the GuideStar article...

Transparency of Nonprofits Improved with new IRS Form 990

By Carroll Boardway

The dramatic turmoil of our current financial situation has been injected with an ever stronger platform of full transparency. Not to ignore nonprofit organizations, the Internal Revenue Service has recently updated Form 990 to reflect the greatest number of changes in reporting requirements since the 1970s.

Though nonprofits do not pay income taxes on their revenue, they are obligated to report their income annually. In addition to these reports, called 990s, these groups are now faced with the demands required by a deeper look into how the organization operates. Such scrutiny extends from policies of the entity to board configuration and compensation for the executive team, among others. The goal is for the IRS to ensure that all nonprofits have built in safe-guards to promote accountability and protect from corruption, thus giving donors peace of mind when making the decision on which organizations to fund.

Read the rest of the Fort Worth Business Press article here.

Tips for Form 990 Filers

The IRS is providing a series of filing tips to help tax-exempt organizations and tax practitioners as they prepare to file the redesigned 2008 Form 990. The latest tip explains how to complete Part VI, relating to governance.

You can also review the Form 990 filing tips archive provided to us by the IRS.

Half a Million Nonprofits Could Lose Their Tax Exemptions

Did you know that in May 2010, half a million nonprofits could find themselves stripped of their exempt status? The IRS estimates that that's the number of smaller organizations that have failed to file a Form 990-N.

Read the rest of the story at the GuideStar website.

HSCC Testimonial: Kelly Hill (2001-2003)

Kelly Hill represented BDPA Los Angeles chapter in the national high school computer competitions held in Chicago (2001), Orlando (2002) and Philadelphia (2003). She is a positive example of the power of our student information technology education & scholarship (SITES) program. Kelly was kind enough to provide us with a testimonial on her experience. She wrote,

My name is Kelly Hill and I’m from Los Angeles, California. I am currently a junior at Clark Atlanta University where I am majoring in Business Administration with a concentration in Management. I currently work for the IRS as a Data Transcriber. After graduating from Clark Atlanta, I intend on working in corporate for no longer than five years and then pursue my dream as an entrepreneur. I want to collaborate with my brother, Clyde Hill, to start a computer company. Those are my long term goals that I will achieve.

BDPA has helped me learn how to work with others in a team based setting. They’ve also taught me how to problem solve because I am able to take what I’ve learned from the computer aspect and apply it to problem solving issues in the business world. So, BDPA has been a useful resource that I still communicate with and rely on for support and knowledge.

We want to increase the amount of scholarship funding available to Kelly and others like her. BETF-Blog readers can make an instant donation to the Bemley Scholarship Fund right now if you so desire. Click here or use the options available to you in the right-hand navigation bar of this blog.

In the meantime, why not POST A COMMENT to Kelly Hill. Let her know what you think of her testimonial!