IRS Seeks Information from Self-Declarers

March 21, 2013 Posted by Jessica Shofler in IRS, News

Do you know that nonprofits other than 501(c)(3)s (except 501(c)(9), 501(c)(17), and 501(c)(20) orgs) can self-declare their tax exempt status when they file their first Form 990? If you think this can lead to abuse, the IRS agrees. That’s why the IRS has commenced a study of self-declarers.

As part of its study, the IRS is asking more than 1,300 of these self-declared organizations to complete an online questionnaire. The comprehensive questionnaire includes probes into an organization’s revenue and expenses, compensation, and activities.

The IRS will use the questionnaires to determine whether organizations have correctly classified themselves under the appropriate section and whether they meet the section’s requirements. The results will guide the IRS as it informs Congress of the need for additional statutes and updated regulations.

Only those organizations that receive letters are able to complete the questionnaire. The last time the IRS sent a mass questionnaire, it wound up auditing almost 10% of the organization’s surveyed. If your organization is one of the “lucky” ones picked, do not complete it without professional assistance. Of course, we are happy to help you prepare your response. In the meantime, click here to get more information about the questionnaire.

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Casey Summar, Partner, The Law Firm for Non-Profits, 4705 Laurel Canyon Blvd, #306, Studio City, CA 91607

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