IRS Targets Nonprofit Self-Declarers

It’s official. IRS targeting of nonprofit self-declarers will begin this year.

Most organizations that qualify for federal tax-exemption other than non-church 501(c)(3) charities do not need to apply for tax-exemption. Whereas may do, they can simply self-declare that they are tax-exempt.

When such nonprofit organizations complete their Forms 990 they need only identify their 501(c) category. That will change in 2015.

Last week the IRS announced that starting next year, self-declIRS Targets Nonprofit Self-Declarersared exempt organization will be required to check a box on their Form 990 that they are self-declared. While the IRS is coy about what it will do with this information, it is likely they will use is to target organizations for possible audits. This seems to be a follow-up to an IRS study commenced two years ago.

Is your nonprofit organization’s exemption self-declared? Do you think this new rule will result in more organizations applying for tax exemption instead of self-declari

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