Legislation

State and local governments, eager to close their budget gaps, are increasingly going after charities and other tax-exempt groups. Government officials are proposing new fees on nonprofits to help pay for services. They're also challenging the exemptions these groups get from sales and property taxes.

A new campaign-finance bill pending in Congress aims to lift the curtain on who is paying for advertisements and other communications that could influence elections. The bill, created in response to a Supreme Court ruling earlier this year, would require nonprofit groups organized under 501(c)4 of the federal tax code -- along with wealthy corporations -- who issue political communications to reveal their top donors.

Congressional leaders announced this morning they would unveil new legislation to extend through the end of 2010 various tax incentives for charitable donations, including gifts made by older people from individual retirement accounts.

The bill would also ease rules governing employer contributions to defined-benefit pension plans, a move that would offer relief to charities whose plans have suffered investment losses during the economic downturn.

In a statement regarding the May 17 filing deadline for tax-exept status, IRS Commissioner Doug Shulman acknowledged that many small tax-exempt organizations filed to file the required information in time, and urged them to still file their information even though the deadline has passed.

In a statement regarding the May 17 filing deadline for tax-exept status, IRS Commissioner Doug Shulman acknowledged that many small tax-exempt organizations filed to file the required information in time, and urged them to still file their information even though the deadline has passed.

(Reuters) — The U.S. health care overhaul bill will provide insurance coverage for millions of Americans and possibly lower healthcare cost inflation, but it poses an increased credit risk for nonprofit providers, Standard & Poor's said on Thursday.

"We expect that the expanded insurance coverage will create winners and losers among providers, based on their existing and future payor mix, their ability to meet demand from newly insured patients, the impact on disproportionate share funding, and the impact on commercial health care insurance availability and rates," said S&P analyst Liz Sweeney in a new report.

The outlook for 2010 remains one of stable credit quality after a period of deterioration from 2007 to 2009. But risk will increase in the next three to five years as many of the key provisions of the bill go into effect, S&P said.

Washington, D.C., and Williamsburg, Va.—GuideStar, the leading source of nonprofit information, encourages grantmakers and businesses that work with exempt organizations to remind their grantees and clients that the first legally mandated revocations of tax-exempt status are imminent.

"Once the IRS begins issuing revocation notices in 2011, the sector will change dramatically," noted Bob Ottenhoff, president and CEO of GuideStar. "It will be important for grantmakers, businesses that provide nonprofit discounts, and others who need to verify nonprofit status to know which organizations are still exempt and which are not. As the IRS announces its procedures and as information on the revocations becomes available, we will incorporate them into GuideStar Charity Check, our due-diligence tool for verifying charitable status and researching supporting organizations."

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, a process that can take several months.

More than 30 nonprofit organizations wrote to President Obama today urging him to ease anti-terrorism restrictions that the groups say hinder legitimate charitable giving and aid work abroad.

The organizations -- which include American Jewish World Service, the Charity and Security Network, and the Muslim Public Affairs Council -- reminded Mr. Obama of a statement he made last June in Cairo in which he said that some charitable rules have made giving difficult for American Muslims and that he would work with them to help fulfill their religious obligation to donate.

Nonprofits might be making more money than you think.

"The nonprofit sector is an important economic sector. It's 11 percent of the workforce," says Sonal Shah, White House Office of Social Innovation and Civic Participation director. "Nonprofits generate $600 billion a year."

Shah spoke at the Alliance for Nonprofit Excellence's Fifth Annual conference this morning, telling attendees that her office is trying to put a spotlight on issues and innovations.

"The President and First Lady believe that the solutions to the problems we face are in communities around the country," Shah said. "Our job is to find those."

The office allocates growth funds to successful programs around the country and looks for public/private partnerships, such as the text4baby program with Johnson & Johnson and the U.S. Department of Health and Human Services. Text4baby aims to stem high infant mortality rates among low-income mothers by sending those women a text about what they should do each week of their pregnancy.

MONTPELIER — The Champlain Valley Exposition already is selling tickets — without charging sales tax — for headline acts Bill Cosby, Justin Bieber and Keith Urban, who are booked to perform during the annual fair in late summer.