Last month IRS sent out a wake-up call to 275,000 exempt orgs who have not been keeping up with their filing and communications requirements. We all know how easy it is to let those things fall by the wayside – especially since they tend to be run by volunteers who do not pass on instructions to the incoming volunteers.
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Well it’s time to catch up on all those filings. Small organizations can regain their status, retroactively if they file for reinstatement by 12/31/2012. IRS Notice 2011-43 provides instructions on which organizations qualify for reinstatement – and what do.
The notice is only six pages long. Sounds pretty simple, right?
Well, several years ago, a friend asked me to bring one of her city’s exempt orgs back into compliance. At the time, I was considering selling my tax practice to an Enrolled Agent I had known and respected for more than a dozen years. So, I turned over this project to her. It was really simple, a friends of the library or police kind of thing with very few transactions. A few open questions, sure.
She did such a bizarre job, that it took three years of discussions with IRS to straighten out her work. The lesson I learned is that many seasoned, experienced tax professionals are really totally unfamiliar with the rules related to 990s – even the easy versions, thereof.
Along comes Sandy Deja, EA. She is the wit and wisdom behind the site offering a ton of free guidance on all things non-profit - http://www.form1023help.com/ .
Sandy has just written a new ebook to help guide us through the maze of reinstatement. It’s easy to follow. It provides you with good excuses to use for the “reasonable cause” for not having filed paperwork to date. http://501c3book.org/
It walks you through the forms and letters you will need in order to ensure your client, or your own pet organization, is reinstatement in time to get retroactive treatment. After all, we don’t want our donors to learn their donations were not tax deductible, do we?
Nor do we want to generate audits of donors, that might turn up other discrepancies in their tax returns, right?
Whether you use Sandy’s 501c3 guide, or just slog through the process on your own – start looking at your client files and start talking to your friends to see who needs help - NOW!