Small nonprofits must file with the thieving IRS

SUNBURY — A little-known rule change by the IRS threatens the tax-exempt status of 136 small nonprofit organizations in the Valley, according to the Internal Revenue Service.

Those organizations include such notable groups as: the American Legion posts in Watsontown, Lewisburg, Danville, and McClure, the Fraternal Order of Eagles, in Sunbury, Milton Fish and Game Association, Lewisburg Nursery School Inc., and the Middleburg Soccer Club.

The rule changes do not apply to churches or church-related operations.

Under the old rules, nonprofits with less than $25,000 in income did not have to fill out paperwork for an annual tax return.

But that all changed with The Pension Protection Act of 2006, which said the more than 714,000 nonprofits, nationwide, with gross receipts less than $25,000 needed to file an annual return with the IRS — the new Form 990-N, also known as the e-Postcard.

It was all part of an effort by the federal government to keep better track of nonprofits.

This new form requests basic information such as an organization’s address, officers name, and website and is the first data to ever be collected on the smallest nonprofit organizations. Nonprofits were given three years to comply with the rule changes, but because more than 300,000 are still in noncompliance, the IRS extended the deadline to Oct. 15.

“Filing to the IRS has never been on our radar screen,” said a Northumberland County member of the American Legion. He asked that his name be withheld and that his chapter not be named. “You don’t want to mess with the I.R.S. Oh yes, we’ll be in full compliance.”

He knew that if his group missed or ignored the deadline they would have their exempt status revoked; they’d have to re-apply for an exemption and pay a user fee of up to $850.

They could also be liable for taxes on any revenue earned before their exemption is renewed.

An I.R.S. spokeswoman said a majority of nonprofits on the list probably don’t know about the law. Because of that, she said, they probably don’t know they’re in danger of losing their non-profit status.

She said other entities might be part of a larger company and not know they had to file as a separate foundation.

Taxpayers will still be allowed to make contributions to the nonprofits until the final list of foundations that have failed to file is listed in 2011.

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Small nonprofits must file with the thieving IRS

Small nonprofits must file with the thieving IRS

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