LEXINGTON — The Internal Revenue Service has announced a one-time, special relief filing program for small nonprofits that are at risk of losing their tax-exempt status because of a recent change in the law. The new deadline is Oct. 15. The Nonprofit Leadership Initiative in the University of Kentucky College of Agriculture encourages employees, volunteers and supporters of nonprofits, especially smaller nonprofits, to urge their organization to take simple, immediate steps to ensure it does not lose its tax-exempt status.
In 2006, Congress passed a law requiring all nonprofits —i ncluding those with revenue of less than $25,000 that used to be exempt from annual filing requirements — to file Form 990-N with the IRS. The new law assumes that an organization that does not file for three consecutive years is defunct and revokes that organization's tax-exempt status.
In May, Kentucky launched a statewide awareness campaign to spread the word about the filing deadline. However, many nonprofits did not hear about the deadline and are now at risk of losing their tax-exemption if they do not file by the new extended deadline. The IRS has published a list of all the nonprofits in each state that still may need to file. That list shows that 4,194 Kentucky nonprofits face the costly and time-consuming prospect of losing their status as tax-exempt organizations if they do not act by Oct. 15.