News and analysis
March 07, 2010

Groups Risk Loss of Charity Status

The IRS is urging charities to be mindful of an approaching deadline that could strip organizations of their tax-exempt status if they have not filed proper forms with the government for the past three years.

Congress passed the policy in 2006, and May 2010 will mark three years of no filing for many groups.

If charities lose their exemptions, they will have to reapply with the IRS. “They basically have to start over,” said Ms. Flax. In the meantime, donors would not be able to claim charitable deductions for their gifts, and organizations could owe income taxes.

Charities with annual receipts greater than $25,000 must file the Form 990 or the Form 990-EZ. Small charities with annual receipts of $25,000 or less may file the Form 990-N.