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VOL. 35 | NO. 22 | Friday, June 3, 2011




IRS removes tax-exempt status of 275,000 groups

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WASHINGTON (AP) — The Internal Revenue Service said Wednesday that 275,000 organizations have lost their tax-exempt status because they failed to file required annual reports for three straight years.

The tax agency said it believed that the vast majority of those groups are no longer in existence, but it said it was setting up procedures to help those companies that sought reinstatement.

The IRS posted a list of the organizations on its website: http://www.irs.gov/charities/article/0,,id=239696,00.html.

IRS data shows that there were more than 1.8 million tax-exempt organizations in 2010. About two-thirds of those are religious and charitable organizations, but also included are labor and agriculture organizations, business leagues, social and recreation clubs, war veterans' groups and others.

The agency said that last year it published a list of at-risk groups and gave smaller organizations an additional five months to file required reports. It said about 50,000 organizations filed during this period.

"During the past several years, the IRS has gone the extra mile to help make tax-exempt groups aware of their legal filing requirement and allow them additional time to file," IRS Commissioner Doug Shulman said in a statement.

The agency said that the status revocation will not affect people who previously donated to organizations on the list but that those organizations will no longer be eligible to receive tax-deductible contributions and any income they receive may be taxable.

A 2006 law requires most tax-exempt organizations to file an annual information return with the IRS. It automatically revokes the status for organizations that fail to file the required papers for three consecutive years. The list pertains to organizations that did not file reports for 2007, 2008 and 2009.

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