Thursday, June 30, 2011

Charitable Organizations’ Losses of Exempt Status

Over 1,000 nonprofit organizations in Utah lost their exempt status at the beginning of June 2011 because they failed to file any sort of form with the IRS. They are no longer included in the list of organizations, contained in Publication 78, that a person can donate to and take a deduction for on their tax return. The IRS has posted a listing of these organizations on their website.

The IRS supposes that many of these are simply organizations that no longer exist and thus never sent in any filing. However, they also recommend that every tax payer check the listing to make sure that, if they are donating to an organization, the organization is on the list.

If you are donating to a "charity" that you are not sure is an exempt organization for IRS purposes, do not simply rely on the letter originally given to the "charity" accepting them as a non-profit organization. That letter may be out of date and if they are no longer an exempt organization for IRS purposes, then any donations made to them are non-deductible on your tax return. Instead, please either refer to publication 78 on the IRS website or contact us and we can find out for you.

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