May 13, 2010

Charities at risk of losing tax-exempt status

DENVER – Nonprofits whose fiscal year is the calendar year must file Form 990 with the Internal Revenue Service by Monday, May 17, or their federal tax-exempt status will be automatically revoked.

The Pension Protection Act of 2006 orders all nonprofit organizations, other than churches and church-related organizations, to file the information form with the IRS.

According to the IRS, this requirement went into effect in the beginning of 2007, which made 2009 the third-consecutive year under the new law. Any organization that fails to file for three consecutive years automatically loses its federal tax-exempt status.

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“The importance of the Form 990 is to ensure that nonprofits do not abuse their tax-exempt status by unethically allocating their funds and/or by profiting in any way,´ said Dale Mingilton, president and chief executive of the Better Business Service Serving Denver/Boulder. “When the BBB reviews charities, this is one of the first items we look for.”

To check a report on a charity, to find a BBB accredited charity, and/or for more information about charity standards, visit www.denver.bbb.org or call 303-758-2100.

DENVER – Nonprofits whose fiscal year is the calendar year must file Form 990 with the Internal Revenue Service by Monday, May 17, or their federal tax-exempt status will be automatically revoked.

The Pension Protection Act of 2006 orders all nonprofit organizations, other than churches and church-related organizations, to file the information form with the IRS.

According to the IRS, this requirement went into effect in the beginning of 2007, which made 2009 the third-consecutive year under the new law. Any organization that fails to file for three consecutive years automatically loses its federal tax-exempt status.

“The importance of the Form 990 is…

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