IRS Introduces ‘One-Time Relief Program’ for Small Charities That Missed Filing Date

The Internal Revenue Service has told thousands of small charities they still have a chance to keep their tax-exempt status even if they missed their May 17 deadline for filing a new online form or are about to miss subsequent deadlines.

Many small groups are in trouble because they failed to file required informational tax returns for 2007, 2008, and 2009 by May 17. But they can preserve their status by filing returns by October 15, 2010, under “a one-time relief program,” the IRS said.

“We are doing everything we can to help organizations comply with the law and keep their valuable tax exemption,” said Douglas Shulman, the Commissioner of Internal Revenue.

The IRS posted on a special page of its Web site the names and last-known addresses of nonprofit groups with jeopardized tax exemptions, along with details of how small organizations can keep their charity status.

Congress passed a law in 2006 to help the IRS keep better track of active charities of all sizes and figure out which ones no longer exist.

As part of the law, small organizations that never had to regularly file returns in the past—those with annual revenues of $25,000 or less—must now each year file a new online return, called a Form 990-N or “e-postcard,” which requires basic information, such as the name of a principal officer and a mailing address.

‘Really Important’

The IRS said all small organizations that fail to file returns by October 15 will have their tax-exempt status revoked, and the tax agency will publish a list of those revoked organizations in early 2011.

“Donors who contribute to at-risk organizations are protected until the final revocation list is published,” the IRS said.

Somewhat larger groups that are eligible to file a different return, called the Form 990-EZ, can also keep their exemptions if they file by October 15 and pay a “compliance fee.”

“It’s really important for small charities to pay attention to this announcement,” Mr. Shulman said. “The last thing we want to do here at the IRS is have these groups lose their tax-exempt status because they haven’t filed a short, simple form.”