Internal Revenue Service

Take a look at Forbes' 13th annual list of the 200 Largest U.S. Charities. They aren’t even 2/100th of 1 precent of the country’s 1.2 million tax-exempt organizations. Yet in their most recent fiscal year the Forbes Charity 200 collectively received $41 billion in gifts — one-seventh of all charitable contributions.

The rankings are based on the amount of private gifts (as opposed to government grants, fee for service or investment revenue) received in the latest fiscal period.

Leaders of 19 nonprofits sent a letter to Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, and the 12 members of the Joint Select Committee on Deficit Reduction (often referred to as the “Super Committee”), asking them to protect the charitable deduction.

In the letter released yesterday, the Alliance for Charitable Reform (ACR) explains the “potential damage to Americans seeking help from nonprofit services” that limiting the charitable contribution tax deduction.

Nonprofits are gearing up to fight President Obama’s plan to pay for his jobs bill in part by limiting charitable deductions. The president wants to limit the amount all wealthy people can write off for charitable gifts as well as housing, medical expenses, and other items.

Nonprofit leaders say that a curb on deductions will stifle giving and that charity write-offs make up only a small percentage of  the money the federal treasury loses in deductions by the wealthy.

The Internal Revenue Service has yanked the nonprofit status of thousands more charities nationwide, including another 500 in Orange County, Calif.

The IRS updated its database of nonprofits which had their status revoked last week. You can find the IRS’s spreadsheets for all non-profits-no-more here.

What does this mean to you? It means the money you donate to these organizations, or pay as membership dues, is no longer tax-deductible. It also means their income is subject to tax.

Why is this happening? These organizations automatically lost tax-exempt status because they failed to file financial reports for three straight years.

Once the immediate crisis passed, many 9/11-related charities broadened their mission to serve more people, such as rescue workers and their families or overseas victims of terror. Others have added educational programs to teach kids what happened on that tragic day.

The key: Adapt, or face irrelevance.

"You can't necessarily make an appeal for something that happened 10 years ago," says Jennifer Adams, CEO of the Tribute WTC Visitor Center in New York. "You have to have a current issue people want to support."

More than $90 million in charitable assets — some donations dating back decades — will be transferred to the Children's Hospital of Michigan Foundation after receiving the appropriate approvals, the children's foundation said Wednesday.

The assets, previously controlled by the Detroit Medical Center, required Michigan Attorney General Bill Schuette and DMC Legacy Board approval for transfer as part of the Dec. 31, 2010, sale of the nonprofit DMC to for-profit Vanguard Health Systems Inc.

In a surprise about-face, the Internal Revenue Service announced that it has dropped any consideration of enforcing gift taxes on donations made to nonprofit advocacy groups. Several big donors to advocacy groups had reported this spring that they had received questions from the IRS about whether they should have paid gift taxes. Many advocacy groups, classified under Section 501(c)(4) of the tax code, spent heavily on political ads in the 2010 election cycle.

Many nonprofits and their affiliates could face expanded requirements to disclose information to the Internal Revenue Service if some tax-agency officials and advisers get their way. What’s more, the IRS might require each affiliate to prove it deserves tax exemption, rather than granting one exemption to cover every affiliate.

Such changes could be a big deal — 250,000 charities are part of big national organizations, the IRS estimates. Organizations like the American Cancer Society, Habitat for Humanity, and the NAACP all would be affected by a change.

Nonprofits around the country have found both alarming and reassuring news as they have reviewed the list of 275,000 groups whose tax exemptions the Internal Revenue Service revoked on Wednesday. The IRS took action against charities that, it says, failed to file required paperwork for three consecutive years.

But the list is misleading in places, with some well-established groups listed that have, in fact, filed their paperwork.

The Internal Revenue Service said that 275,000 nonprofits have lost their tax-exempt status because they did not file legally required documents for three consecutive years. That move trims the number of tax-exempt groups by about 14 percent.

Many of the groups that lost their exemptions are charities, and donors to those organizations cannot claim a charitable deduction for gifts to the groups after the IRS makes the list official.