Small Norwin nonprofits could risk losing tax-exempt status
0 Comments | Tribune – Review / Pittsburgh Tribune – Review, Sep 3, 2010 | by Brad Pedersen
Several charitable organizations in the Norwin region could lose their tax-exempt status if they do not file paperwork with the Internal Revenue Service by Oct. 15.
The IRS published a list of nonprofit organizations that have not filed a tax form for the last three consecutive years. In Pennsylvania, the tax-exempt status of 12,625 organizations is in question.
Attorney Daniel Corbett of Elliott & Davis PC in Pittsburgh guides nonprofit organizations through the process of becoming tax- exempt.
Corbett said that the Pension Protection Act of 2006 included a new regulation requiring all nonprofits with gross revenues of less than $25,000 to file an annual tax return form, starting in 2007, even if they made no income.
The provision stated that any nonprofit organization that did not file returns for three consecutive years could lose its tax-exempt status. Corbett estimates that close to 200,000 organizations across the country could lose their tax-exempt status.
“There are a bunch of nonprofits making less than $25,000 that were and still might be unaware of this rule,” Corbett said. “They should have got notices earlier this year.”
The IRS set deadlines to file the appropriate 990 tax forms in April and May but gave organizations an extension through Oct. 15, Corbett said.
Several organizations were unaware that they are on the IRS’ list of organizations that could lose their tax-exempt status, including the Police Athletic League Umpire School.
Bob Rizzo, PAL president, said the organization’s tax returns have been updated and confirmed for “the past several years.” He does not understand why the organization is on the list, but he plans to review all of its tax documents.
“I’m positive that we have filed every year,” Rizzo said. “This doesn’t make any sense at all, but we’ve got to figure out why we’re on the list.”
Mark Previte, president of the Pennsylvania Council for the Social Studies, said his organization appeared on the IRS’ list, but it is not concerned because it had filed its tax returns.
“We have sent all of the proper paperwork into the IRS,” Previte said. “But when the list was posted online, our materials had not yet been received.”
He said the organization, a teachers group, plans to update its 990 forms before the Oct. 15 deadline.
Corbett said organizations go through a rigorous process to earn tax-exempt status
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