In 2006, Congress passed a relatively little-known measure called the Pension Protection Act. The law permits the IRS to revoke the non-profit status of organizations with less than $25,000 in gross annual receipts, if they fail to file a Form 990, Return of Organization Exempt of Income Tax.  The failure to file Form 990 must occur for three consecutive years.

In an article from TheTimes-Tribune.com, a Pittsburgh, PA attorney estimated that the new rules could affect as many as 200,000 organizations nationwide. The number of non-profits unaware of the law remains disturbingly large.  In response, the IRS extended the deadline for organizations to meet the new filing requirements from May to October.

“Many of these organizations missed the May 17 deadline, and the IRS recognized the need to make some additional outreach efforts to help these small organizations keep their tax exempt status,” said IRS spokesman Mark Hanson.

The Form 990-N, mentioned above for small organizations, is also referred to as the e-Postcard.  “We want to make sure any organization in jeopardy of losing tax exempt status has the opportunity to file this e-Postcard and maintain that tax exempt status,” Hanson said.

The only exceptions to the new rule are religious charities.

Disclaimer:  The information contained in this article is in no way intended for use as legal tax advice.  No assumption should be made that a tax attorney, enrolled agent or former IRS employee was involved in the creation of any content herein.  Advice on personal or business tax matters can be obtained by contacting Advanced Tax Help at (800) 970-8704, or by logging on to www.advancedtaxhelp.com