Council of Nonprofits in the News

Long Road Back For Exemption-Revoked Groups

July 1, 2011

Nonprofits that hope to regain the tax-exempt status that was revoked last month better hunker down for the long haul. The review process by the Internal Revenue Service (IRS) to re-apply for tax-exempt status could take an average six to ninth months, even with the expedited process, according to the National Council of Nonprofits.

“While great care has been taken by the IRS to cull this list, the consequences of a loss of tax exemption are severe to the organization, the people who support it, and the community that benefits from its work,” said Tim Delaney, president and CEO of the Washington, D.C.-based National Council. “It is important that every person whose life is touched by a nonprofit organization – and that is just about everyone – check the revocation list to make sure his or her favorite charitable nonprofit isn’t on the list.”

More than 3,100 Ky. groups lose tax-exempt status

June 23, 2011

Kentucky Nonprofit Network"People who donate and don't look at the list don't discover it's not exempt," said David L. Thompson, vice president of public policy for the National Council of Nonprofits. 'We don't want the public to lose faith in nonprofits."

Danielle Clore, head of the Kentucky Nonprofit Network, said groups lost nonprofit status because they are now defunct, a change in leadership meant the paperwork did not arrive in the right hands or simple neglect.

"It could be any number of things," Clore said.

Thompson said in some cases, groups changed boards or addresses and sought nonprofit status after the changes were made.

"Either they didn't follow up or it's a duplicate listing," Thompson said.

Pennsylvania Association of Nonprofit OrganizationsPatricia Mogan of the Pennsylvania Association of Nonprofit Organizations said at least one group in that state learned it lost nonprofit status after the association received a grant to work with them and checked with the IRS. That group is reapplying, Mogan said.

Even though some groups will have to go through refilling for tax-exempt status, the trimmer list will be a benefit in the future, Clore and Thompson said.

"We're excited," Clore said. "It really helps us to better communicate."

Many Horry, Georgetown county nonprofits under fire no longer exist

June 19, 2011

South Carolina Association of Nonprofit OrganizationsNationwide, about 275,000 nonprofits lost their tax-exempt status, according to the IRS. Of that number, more than 3,000 are South Carolina organizations.

Agencies such as the South Carolina Association of Nonprofit Organizations and the National Council of Nonprofits have been informing people of what they can do if their nonprofit's tax-exempt status has been revoked.

"While they are re-filing or seeking reinstatement, they need to be transparent as possible with their boards, members, and especially with their donors," said Sara Koslow, manager of communications for the National Council of Nonprofits.

Donors' contributions to a nonprofit that has lost its tax-exempt status are not tax-deductible.

IRS nonprofit cuts could be good in the long run

June 16, 2011

Alliance of Arizona NonprofitsArizona Alliance of Nonprofits President and CEO Patrick McWhortor says a new law and a resulting move by the Internal Revenue Service ultimately will give the nonprofit world a better gauge of viable players in the field.

“In some cases, these were chapters of national organizations that changed their approach to affiliates, perhaps an organization achieved their goal but never officially shut anything down, so they are left on the books at the IRS,” he said.

McWhortor said the Arizona Alliance of Nonprofits and its umbrella group, the National Council of Nonprofits, has been reaching out over the past year to inform affected organizations about the tax deadline.

Organizations that lost their status are eligible for reinstatement and must apply through the IRS. The Arizona Alliance of Nonprofits also is offering assistance to those that need help.

Local non-profits losing tax-exempt status

June 15, 2011

Alabama Association of NonprofitsOf the 3,463 Alabama non-profit organizations losing their tax-exempt status, a few of them are from Randolph County.

Among them are American Legion Post 53, Ava-Messser Volunteer Fire Department, Boys & Girls Club of Roanoke, Convenant Enterprises Scholarship, the Junior Service League, Inc. of Roanoke, Lebanon Christian Church Cemetery, Randolph County Court Referral of Roanoke,  Roanoke Rotary Charities Inc., the Roanoke Schools Association, the AACS Student Accident Insurance in Roanoke and two that are reportedly no longer in operation, New Choice Intervention Program of Roanoke and Learning Power Inc. of Wedowee.

Russell Jackson, chief operating officer of the Alabama Association of Nonprofits in Birmingham, said his organization spent a good part of last year trying to let people know the IRS planned to do this and trying to reach the different groups.

Some organizations change leaders every year and through lack of communication the information is not passed on.

Since last week when the list was released he has received a lot of calls that he wishes he had gotten last year when they were working hard on this.

Nonprofit Budget Crunch

June 14, 2011

Tim Delaney, president and CEO of the National Council of Nonprofits, argues that state and local governments are shifting their fiscal burdens onto nonprofits and foundations. States, unlike the federal government, are not allowed to run a deficit, which makes a balanced budget a necessity, not a goal. This means that popular programs like Americorp may face crippling cuts to their funding.

IRS action affects tax-exempt status on hundreds of N.D., Minnesota nonprofits

June 12, 2011

North Dakota Association of Nonprofit OrganizationsUnder the new law, small nonprofits with less than $50,000 in annual revenue need to file a brief and simple application, Form 990N, each year to maintain tax-exempt status., says Dana Schaar, executive director of the North Dakota Association of Nonprofit Organizations, NDANO. Larger nonprofits always have had to apply annually for tax-exempt status and have more complicated filings.

So far, she has not gotten calls from concerned nonprofits who showed up on last week’s IRS list, Schaar said. She suspects that’s because the small nonprofits who needed and wanted to keep their tax-exempt status have done the required paperwork, and those that are defunct or in the process of defuncting simply let their tax-exempt status go.

Bristol Senior Center and Other Nonprofits Lose Tax-Exempt Status

June 11, 2011

In Bristol and Warren, 26 nonprofit organizations were listed, including the Sons of Italy and Benjamin Church Senior Center. Maria Ursini, director of Benjamin Church Senior Center for the past nine months, was surprised by the news. 

"We don't bring in a ton of money, maybe $1,000 a year," she said. "To the best of my knowledge, we've never had to submit anything to stay tax-exempt." 

Ursini said she would work to get to the bottom of the issue. "We're under the town's budget," she said "The town usually handles everything."

According to the release, the National Council of Nonprofits has developed a special webpage and tip sheet on options available to organizations who have been listed as no longer tax-exempt. The release goes on to say, "nonprofits that re-apply may request in a letter to the IRS that the reinstatement of their tax-exempt status be retroactive to the date of their original tax-exempt recognition, but the IRS will grant that request only if it determines that there was 'reasonable cause' for the nonprofit to have missed the filing deadlines.  Make sure to carefully follow the instructions on the IRS website for requesting 'retroactive reinstatement' of your organization’s tax-exempt status. You can contact your State Association for assistance in applying for reinstatement."

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