Nearly 200 nonprofit, tax-exempt organizations in Lafayette Parish — some widely known, others obscure — face an Oct. 15 deadline to file returns with the Internal Revenue Service or face revocation of their tax exemptions.
Before 2007, such organizations with revenues below $25,000 were only required to file a one-time form with the IRS. But in 2006, as part of the federal Pension Protection Act, a new requirement that such groups file annually with Uncle Sam went into effect. The 192 Lafayette organizations on the IRS list did not file the required returns in 2007, 2008 or 2009. They include groups like the Lafayette Parish Bar Association, Lafayette Concert Band, the Ascension Day School Foundation, the St. Leo chapter of Knights of Columbus, Games of Acadiana and the Prairie Elementary School Parent-Teacher Club. However, says Deirdre Harris Stepner, IRS communications liaison for Louisiana and Mississippi, some of the groups on the list, which was compiled during the summer, may have since filed their returns with the agency while others may be defunct. (The Artists Alliance, which disbanded several years ago, is on the list.)
“Most tax-exempt organizations operate on a calendar year, meaning Jan. 1 through Dec. 31 — their returns are due May 15,” Stepner explains. “But you also have some fiscal-year organizations, so they may have had a return that was due after that. Any organization that had a return due by May 15 and over the summer, I think up until Sept. 15, qualified for this special relief if they had not met the requirement for three consecutive years. This gives them until Oct. 15 to come into compliance. But the list is not updated, so its effective as of June 30. Anyone who has filed since then may still be on the list but they could be in compliance.”
More than 5,100 small, tax-exempt organizations in Louisiana are facing revocation of their status. Groups that fail to file a 990 form (or 990EZ or 990N) by Oct. 15 will have their tax exemptions revoked. However, Stepner adds, those revocations will not become effective until early 2011 when the official list of revocations is released by the IRS. In the meantime, donations to those organizations who miss the Oct. 15 deadline will still be tax deductible until the release of the revocation list early next year. But after that, donations to groups who have lost their tax-exempt status will not be tax deductible.
Stepner has been traveling Louisiana and Mississippi spreading the word of the impending revocations. She says many of the groups may not even realize their tax-exempt status in jeopardy. Some of these organizations “may be under a lodge system or fraternal organization,” she says, and they assumed only their parent organization was affected.
Stepner is urging organizations who fear they might be in jeopardy of losing their tax exemptions to check their records and ensure they’re in compliance.
“If you’re an organization that uses the form 990N — for small organizations with income under $25,000 — you would receive an email confirmation with your filing; it’s very simple, it’s filed electronically through our website,” Stepner says. “If they filed either the form 990EZ or the form 990, they would need to get a copy of it and contact IRS to try and get our records straight.”
And if a group misses the deadline and losses their exemption, it will need to reapply with the IRS. “That would require them submitting the paperwork and the required fee, which is based on the amount of income the organization has. And it goes through our approval process for tax-exempt status. How long it could take is going to depend on the number of applications that we may have at that point.”
With more than 5,100 organizations facing exemptions, the queue to reapply could get quite long and the process for reestablishing a tax exemption could take some time.
To find out if your nonprofit, tax-exempt organization is facing revocation, click here.
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