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The nonprofits can preserve their nonexempt by complying with a one-time relief program being offered by the IRS.
Some of the local organizations appearing on the IRS list include mutual water companies, peace officer associations, grange patron groups, business associations, food cupboards, community radio stations and booster clubs.
“Attaining 'tax-exempt' status is a big event in the life of a nonprofit organization,” said Mary Heare Amodio, president of the Lake County Bar Association. “Because of the huge impact this may have on local nonprofits, the Lake County Bar Association has compiled a list of affected Lake County organizations.”
She said members of the community who would like to review the list can request a copy from by sending an email to This email address is being protected from spambots. You need JavaScript enabled to view it.; use the words “IRS list” in the subject line.
The current situation arose when Congress passed the Pension Protection Act of 2006. In it are two important changes affecting tax-exempt organizations, effective the beginning of 2007.
First, it mandated that all tax-exempt organizations, other than churches and church-related organizations, must file an annual return with the IRS. The Form 990-N was created for small tax-exempt organizations that had not previously had a filing requirement.
Second, the law also required that any tax-exempt organization that fails to file for three consecutive years automatically loses its federal tax-exempt status.
The IRS said it conducted an extensive outreach effort about the new legal requirement but, even so, many organizations have not filed returns on time.
If an organization loses its exemption, it will have to reapply with the IRS to regain its tax-exempt status. Any income received between the revocation date and renewed exemption may be taxable.
Organizations can check their status on the IRS.gov Web site at the following link: http://www.irs.gov/charities/article/0,,id=225889,00.html.
For donors, once an organization has its exempt status revoked, their contributions are no longer tax-deductible.
Two types of relief are available for small exempt organizations — a filing extension for the smallest organizations required to file Form 990-N, Electronic Notice (e-Postcard), and a voluntary compliance program (VCP) for small organizations eligible to file Form 990-EZ, Short Form Return of Organization Exempt From Income Tax.
Small organizations required to file Form 990-N simply need to go to the IRS website, supply the eight information items called for on the form, and electronically file it by Oct. 15. That will bring them back into compliance.
Details about the VCP are on the IRS Web site, along with frequently asked questions.
“If you do not have your filings up to date, now's the time to take action and get back on track,” said IRS Commissioner Doug Shulman.
The IRS will keep today’s list of at-risk organizations on IRS.gov until Oct. 15, 2010.
Organizations that have not filed the required information returns by that date will have their tax-exempt status revoked, and the IRS will publish a list of these revoked organizations in early 2011.
