Nonprofit tax exemptions at risk - Hawaii News Now - KGMB and KHNL

Nonprofit tax exemptions at risk

By Howard Dicus - bio | email

HONOLULU (HawaiiNewsNow) - Thousands of small nonprofits across America, including hundreds in Hawaii, faced a Friday deadline to fill out an online form for the Internal Revenue Service or lose their tax-exempt status.

The deadline affects a large number of 501(c)(3) nonprofits that have not kept up with annual filings to renew their tax exempt status, without which their fundraising capacity could be crippled.

"More than 1,700 small nonprofits in Hawaii could lose their tax-exempt status," the Hawaii Alliance of Nonprofit Organizations said in a notice to members. "Many had been exempt from annual IRS filings in the past and were not aware of the current requirements."

The crisis this week stems from action taken in 2006, when Congress voted to require annual filings by all tax-empt organizations except for church groups. The requirement began in 2007, with organizations losing their exemption after three years without filing.

HANO named some affected nonprofits to give some examples, citing in its warning the Honolulu Boy Choir, the Friends of the Royal Hawaiian Band, the Kahala Business Association, and the Kalihi Valley Homes Tenants Association.

"The IRS is offering a one-time, two-part Filing Relief Program to help small tax-exempt organizations who have failed to file for three consecutive years to come back into compliance and allow them to regain their tax-exempt status," the IRS said on its Web site.

The IRS listed at-risk Hawaii nonprofits...

<http://www.irs.gov/pub/irs-tege/hi.pdf>

...but said the list may be incomplete. It also includes many nonprofits that have already recognized the requirement and are already in compliance. Significantly, many of the nonprofits appear to be small community organizations run by volunteers who may not be aware of either the requirement or the imminent deadline.

The IRS has also produced a frequently-asked-questions page of links to more information.

<http://www.irs.gov/charities/article/0,,id=225954,00.html>

Here is the warning issued by the Hawaii Alliance of Nonprofit Organizations.

<http://hano-hawaii.org/october-newsletter/news-for-nonprofits/times-running-out-for-nonprofits-to-file-with-the-irs/>

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