Internal Revenue Service

In spite of the economic swoon of 2008-9, the consultants who serve charities and foundations have seen a huge boom in demand for their services over the past decade, in part because of the accompanying boom in new nonprofit organizations—and increasing pressure from donors, government, and the public to show results in exchange for support.

The consulting field is evolving as well as growing, with more specialists and more independent operators presenting a wealth of new options and challenges to nonprofit leaders looking for affordable outside help.

Tens of thousands of small charities will soon lose their tax-exempt status under federal law if they fail to meet a deadline for filing a simple eight-item informational tax form that would take them as little as five minutes to complete.

The consequences are significant for organizations that fail to file the new form with the Internal Revenue Service by October 15. And the deadline could have ripple effects throughout the nonprofit world, as organizations and the IRS will likely have to work for months to restore lost exemptions.

The Internal Revenue Service has released an online widget that charities, donors, and volunteers can place on their Web or social-networking sites "to help spread the word about the one-time filing relief for small organizations at risk of losing their tax-exempt status."

The IRS announced in July that small groups in danger of losing their exemptions because they have failed to file required informational tax returns (called Forms 990-N or e-Postcards) can preserve their charitable status by filing returns by October 15, 2010.

The Internal Revenue Service is worried that many small nonprofits, such as volunteer fire departments, cemetery associations and 4-H Clubs, may lose their tax-exempt status despite an extension of a filing deadline.

Earlier this year, the IRS began warning charitable organizations who have enjoyed tax-exempt status that they could lose it because of a tax law change in 2006 requires even small nonprofits now to file certain forms.

The Internal Revenue Service reminded thousands of small charities that they can keep their tax-exempt status even if they missed their May deadlines to file a new online form.

The IRS also released additional advice for some organizations, including those that believe they are exempt from filing because they are religious organizations.

The Internal Revenue Service announced how it will help thousands of small charities keep their tax-exempt status even if they missed their May 17 deadline for filing a new online form or are about to miss subsequent deadlines.

Small groups at risk of losing their exemptions because they failed to file required informational tax returns for 2007, 2008, and 2009 on May 17 or later can preserve their status by filing returns by October 15, 2010, under “a one-time relief program,” the IRS said.

More than 292,000 nonprofit organizations—about 18 percent of the charities in the United States—may lose their tax-exempt status in the next year for failing to file a tax return with the Internal Revenue Service, according to a report released on Thursday by the Urban Institute’s National Center for Charitable Statistics.

WASHINGTON — The Internal Revenue Service today released an interim report summarizing responses to compliance questionnaires sent to 400 public and private colleges and universities in October 2008. Colleges and universities make up one of the largest nonprofit segments in terms of revenue and assets.

The interim report contains preliminary information on the respondents’ organizational structures, demographics, exempt and unrelated business activities, endowments, executive compensation as well as governance practices. Respondents are divided into three groups based on size of student population.

April 23, 2010, Chronicle of Philanthropy — The Internal Revenue Service is not backing away from its controversial efforts to promote good governance by charities, according to its top nonprofit regulator.

The federal tax code does not explicitly set out governance standards for the IRS to enforce, but the tax agency in the past two years has been keeping an eye on charities' governance practices -- a move that has drawn criticism from some observers.

April 23, 2010, New York Times — As many as 400,000 nonprofit organizations are weeks away from a doomsday.

At midnight on May 15, an estimated one-fifth to one-quarter of some 1.6 million charities, trade associations and membership groups will lose their tax exemptions, thanks to a provision buried in a 2006 federal bill aimed at pension reform.

“It’s going to be an unholy mess once these organizations realize what’s happened to them,” said Diana Aviv, president of the Independent Sector, a nonprofit trade group.

The federal legislation passed in 2006 required all nonprofits to file tax forms the following year. Previously, only organizations with revenues of $25,000 or more — or the vast majority of nonprofit groups — had to file.

The new law, embedded in the 393 pages of the Pension Protection Act of 2006, also directed the Internal Revenue Service to revoke the tax exemptions of groups that failed to file for three consecutive years. Three years have passed, and thus the deadline looms.