What has come as a surprise to many, the IRS has automatically revoked tax-exempt status for approximately 275,000 nonprofit organizations across the country. In Arizona alone, over 4,000 groups have lost their tax-exempt status. Here is a small sampling of area charities, foundations, and not-for-profit organizations that have been rendered non-exempt from federal taxes:
Amerind Incorporated, Phoenix
Chandler Junior Chamber of Commerce, Chandler
Fifth Avenue Area Merchants, Scottsdale
House of Hope Counseling, Inc., Peoria
Metro Pops Orchestra, Phoenix
One Safe School Foundation, Mesa
Take Pride in Arizona, Inc., Phoenix
Vision for Youth, Inc., Tempe
Women, Children & Families at Risk, Phoenix
A nonprofit, or not-for-profit, organization does not enjoy having its net profits exempted from taxes without actively applying for tax-exempt status with the IRS first – this process take time, careful planning, and IRS filing fees. Once the nonprofit has been approved by the IRS as tax exempt, the organization typically works diligently to keep things that way. When so many nonprofit organizations have their hard-won tax exempt status automatically stripped away, it is a clear indication of larger economic problems across the country.
In 2006, Congress enacted the Pension Protection Act requiring annual information or notice returns from most tax-exempt organizations. With the exception of churches, almost all tax-exempt organizations are required to file information returns every year with the IRS. If the organization fails to file annual information returns or notices for three consecutive years, then the IRS will automatically revoke that nonprofit’s tax-exempt status.
Phoenix area residents who make contributions or join non-profit groups, and businesses that deal with tax-exempt organizations in their operations, should take a few moments to review the IRS Automatic Revocation of Exemption List to ensure that the organization believed to be tax-exempt still is.
At the Zolman Law, our experienced Arizona Tax Attorneys and Phoenix Bankruptcy Lawyers provide valuable tax information and tax relief advice for individuals and businesses finding themselves in trouble with the IRS. For more information about how we can help you through your debt problems, contact us today and schedule a FREE Confidential consultation at our Mesa offices.