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Donít Let Your Chapterís Tax-Exempt Status Expire

During the past two years, we’ve published a number of articles discussing IRS regulation requiring small, tax-exempt organizations, like chapters, to file a tax return. For most chapters, it’s simply a matter of filing the 990-N e-postcard – as long as the annual gross receipts are  $25,000 or less. (This will increase to $50,000 for the 2010 tax year). Beginning in 2010 this became a mandatory filing for the 2009 tax year and was due on May 17, 2010. Despite this, a number of chapters haven’t filed with the IRS. If your chapter doesn’t submit the 990-N e-postcard, you risk loss of your tax-exempt status.

The IRS has recently published a list of tax-exempt organizations that haven’t submitted their required filings and are at risk of losing their tax-exempt status. It has issued an October 15th, 2010, deadline to come into compliance. Please go to the IRS website and check to see if your chapter is on the list (sorted by state). And if so, complete the 990-N form.

What does this mean if your chapter is on the list? If your chapter doesn’t submit the 990-N e-postcard by October 15, 2010, the chapter risks losing its tax-exempt status and would be required to reapply in order to be recognized as 501(c)(3).

In some cases your chapter may have successfully applied for and received 501(c)(3) status from the IRS and wasn’t aware of the filing requirements. However, the IRS made a decision that all nonprofit entities would be required to file each tax year or risk loss of their tax status. In addition, it’s important to note, that while your chapter may have successfully been approved as a public charity and tax-exempt organization a number of years ago, the application and review process has become much more rigorous (and expensive) and there’s no guarantee that your chapter would receive 501(c)(3) status if you had to reapply. So don’t risk losing it; if the form hasn’t been completed by your chapter, take just a few minutes to complete the 990-N e-postcard.
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