NPO News: if you have a small tax-exempt NPO (i.e., 990 – N and 990 – EZ), you may qualify for a one – time – only tax relief offer from the Internal Revenue Service (and keep your tax exempt status!), but only if you have failed to file your returns for 2007, 2008, and/or 2009.
Whatever the case, be sure and check the IRS website (IRS.gov, of course) to see if your organization’s name is on the list. Even if you believe that your returns are in order, a quick trip to the website can remove any doubt. Better safe than sorry, after all!
NPOs on the list have a number of resources to get back in the IRS’ good graces. “We are doing everything we can to help organizations comply with the law and keep their valuable tax exemption,” IRS Commissioner Doug Shulman said. “So if you do not have your filings up to date, now’s the time to take action and get back on track.”
And some tax filings are influenced by unique circumstances. Consider the case of a non profit organization that received a large reward after winning a legal claim following a boating accident that occurred during a benefit for the NPO. Thanks to the expertise of a well known New Orleans law firm of maritime attorneys who handled the case, the non profit organization received a significant award. Normally maritime attorneys are engaged for lawsuits involving seamen who are seriously injured while employed on US vessels plying the inland waterways of the United States, as well as waters offshore. Maritime injury lawyers have vast knowledge of maritime law and the Jones Act and are dedicated to helping injured seamen get the full amount of compensation for their injuries. In the case of the law firm who represented the NPO, one of its lawyers was a member of the NPO’s managing board and offered to help them after the boating accident. Anyway a tax liability was incurred and went unpaid for several years, creating another problem. Generally, local governments are quiet lenient about such windfalls, but the tax laws are tricking and depending on what state your NPO is registered in, you may or may not have to file a separate document declaring such income.
Among the options are a simple filing extension (for NPOS that use Form 990-N) as well as a more involved Voluntary Compliance Program (VCP) for filers of 990 – EZ. If the requirements of either offer are completed by October 15th, the NPOs will avoid the difficulty of reapplying for tax-exempt status (as well as potential taxes on any money received during the interim!).
NOTE: NPOs that file using the standard Form 990 or the private foundation Form 990 – PF will NOT have these options.