IRS - photo courtesy of alykat on Flickr.
This is the team on the hot-seat-of-the-week
. They’re the ones praying for a devastating tornado, locust outbreak, politician meltdown or the return of Jesus. Anything to get them off the front page and out of the crawl.
It’s the IRS office accused of unfairly scrutinizing and delaying applications for tax-exempt status from conservative political organizations like the Tea Party.
I don’t think the low-level staffers in the Determinations Unit were politically motivated. I think they were trying to deal with a mountain of work while understaffed, so they searched for keywords to aggregate applications and handle similar groups with a degree of regularity.
We’ve seen for years the unit is understaffed and struggles to keep up:
– application responses routinely take close to a year and I’ve known groups that waited months longer than that
– an online application project was delayed, and I haven’t heard about it since
– the 2011 loss of tax exempt status for 275,000 charities meant many thousands would reapply, adding monumental burden
Much is being made of the unit’s requests for donor lists, but how a group is funded has long been part of the criteria for determining whether an organization qualifies for tax-exempt status.
I’m looking at an IRS letter from 2001 confirming a client’s exempt status. The agency informs the organization that if its “sources of support, or its character, method of operations, or purposes have changed” there may be a change in the exempt status.
I predict this scandal will lead from IRS Code section 501(c)(4) to 501(c)(13):
Cemetery companies owned and operated exclusively for the benefit of their members . . .
Then we’ll learn where the bodies are buried.
Big Nonprofit Ideas for the Other 95%
Listen live or archive:
Gary Vaynerchuk: A Conversation With Gary Vaynerchuk
We’ll find out from this New York Times best-selling author, sought after speaker, social media consultant and wine expert what insights his book “The Thank You Economy” holds for small- and mid-size nonprofits.
Maria Semple: Maria’s Mixed Bag
Maria Semple, The Prospect Finder and our prospect research contributor, has a few things for you this month: a conference reminder; a tweak to Google Alerts; and a report, “”Millenials and Money”" from Merrill Lynch.”
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IRS Form 990
If your charity’s tax year is the calendar year, your IRS form 990
is due by May 15.
Not sure if you have to file? Here’s help.
The form 990 filing deadline is four-and-a-half months after the close of your fiscal year. If your fiscal year ended on December 31, 2012, then your 990 is due by May 15th. The IRS expresses the deadline as “the 15th day of the fifth month” after close of your fiscal year.
Years ago, someone in a seminar was quite vociferous about how I was wrong to say four-and-a-half months. I couldn’t dissuade him. He wasn’t quibbling over “half a month” leading to the 14th of May.
He didn’t see the equivalence. I was polite.
Ninety-day extensions are granted automatically using form 8868. Typically charities need the extension because their previous year’s audit isn’t finished. Additional 90-day stretches aren’t hard to come by, but are not automatic. Use the same form, part II.
I’ve seen plenty of 990′s delayed for more than a year. That plays havoc, by the way, with charity registration deadlines in the states where you solicit donations. I know that work intimately. I wrote a book about it. I also published a paper.
Not sure which form to file (990, 990-EZ, 990-N postcard)? Here’s help.
Important fine print: I am not your attorney or your accountant. Seek the advice of your professional advisors in all matters of IRS compliance.