Just Checking: Nonprofit Compliance
Compiled by Valerie F. Leonard
Did you know that tax exempt organizations are 2 times more likely than tax payers to be late with filing annual returns with the IRS? There are approximately 1.4 million registered organizations in the United States (IRS, October 2, 2014). Of this number, 579,114 registered organizations, or 40%, lost their tax exempt status as a result of not filing Form 990 for three years in a row. Just two years ago, there were approximately 1.2 million nonprofit organizations with about 32% losing their tax exempt status for failing to file Form 990 three years in a row. In contrast, about 85% of individuals and corporations file their income taxes (Form 1040) on time.
It’s that time again. Make sure your organization has completed the necessary filings to
maintain tax exempt status. Be sure to 1) File Annual Reports to the Secretary of State. ALL Not-for-Profit Corporations must file an annual report of officers and directors with the Secretary of State. The due date depends upon when the corporation was formed. The annual report is due before the
first day of the corporation’s anniversary month each year. The
anniversary month is the month in which the corporation was formed. For example, if the date of incorporation was Sept. 15, the anniversary month is September and