Client Alert

IRS Warns Tax-Exempt Organizations: Last Chance to File New Required Forms

August 02, 2010


The Pension Protection Act of 2006 has not been on the radar of hundreds of thousands of tax exempt organizations, particularly smaller nonprofits unaccustomed to filing annual information returns with the Internal Revenue Service (IRS). There was nothing in the title of the act to alert Exempt Organizations that it carried major changes for them in disclosure and filing requirements.

As a result of this legislation, almost all Exempt Organizations (EOs, in IRS parlance) must now file annual information returns with the IRS. Even the smallest EOs, whose annual gross receipts are normally $25,000 or less, became responsible, for the first time, to file a return each year. Beginning in 2010, failure to meet the filing requirements can cause an organizations tax exemption to be automatically revoked. Revocation of the tax exemption can cause a nonprofits receipts to be taxable income and can jeopardize donors ability to deduct their charitable contributions to the organization.

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