IRS Allows Small Charities a Reprieve From Tax-Filing Deadline

Washington

The Internal Revenue Service has announced that it will help small charities keep their tax-exempt status even if they missed the May 17 deadline for filing a new online form.

Doug Shulman, the IRS commissioner, said in a statement that the IRS had conducted an “unprecedented outreach effort” to explain the new law, which requires charities with annual revenues of $25,000 or less to file a Form 990-N, or “e-postcard.” Those failing to file for three consecutive years lose their tax exemptions.

Nevertheless, Mr. Shulman said, many of the affected groups are just learning of the May 17 deadline, the first three-year filing deadline for groups with fiscal years ending in December. “I want to reassure these small organizations that the IRS will do what it can to help them avoid losing their tax-exempt status,” he said.

Congress passed a law in 2006 to help the IRS keep better track of the smallest charities, which did not previously have to file returns regularly, and determine which ones no longer exist. The “e-postcards” require basic information like the name of a principal officer and a mailing address.

Some research groups have estimated that more than 300,000 organizations on the IRS’s books could lose their tax exemptions, many of them because they are defunct. Some nonprofit experts feared, however, that many legitimate small charities could be hit simply because they were unaware of the new requirement. (See The Chronicle‘s article on the IRS rule change.)

Mr. Shulman said the IRS would provide guidance “in the near future” about how it will offer relief to the affected charities. “So I urge these organizations to go ahead and file-even though the May 17 deadline has passed.”

Number of Organizations Registered with the IRS by State