Thursday, June 23, 2011

Sen. Schumer announces new website addendum

The Observer reported that Sen. Charles Schumer announced Wednesday a new addition to his website to help local non-profit organizations.

The Internal Revenue Service has recently released a list of New York non-profit organizations that have lost their tax exempt status. This list contained 275,000 nonprofits nationwide which included 19,000 non-profit organizations located in New York state.

"Upstate New York is hands down one of the best places in the country to live and raise a family. And we owe our high quality of life in large part to the tens of thousands of non-profit groups that serve our communities," Schumer said.

Approximately 562 nonprofits lost their status in the Southern Tier in addition to 687 nonprofits losing their status in Western New York.

"For several decades, large nonprofits have been required to submit an involved annual report to the federal government detailing their activities, income and expenses. But small, community-based nonprofits with limited revenue were exempt from this paper," Schumer said during a conference call.

In 2007, legislation was changed requiring all non-profit organizations to file a yearly form but most nonprofits were unaware of the new requirement, according to Schumer.

"Many of these organizations are too small to employ an accountant or tax lawyer to help them navigate the ever-changing nuances of the tax code, so they were completely unaware of the new requirement," Schumer said.

Being named on this list means, he implies, that a non-profit organization has not filed paperwork for three consecutive years. Being named on this list means nonprofits cannot continue having a nonprofit status and any income is eligible for taxation, including donations. Being eligible for taxation on donations can hinder fundraising.

If a nonprofit is on the IRS list and would like to reinstate their tax exempt status, there are various steps that must be taken.

"If a group has proof that they met the filing requirement for one or more of the last three years, they simply have to fax the form to the government, and they will be reinstated, free of charge," Schumer said.

If a group has failed to file the correct forms, forms can be resubmitted. The nonprofit status will be restored for a fee of $100 if the group has receipts that total less than $50,000 annually. The fee will increase from $100 to $850 effective Jan. 1, 2012.

Non-profit organizations who have questions about the whole process can go online to Schumer's website, for more information and for the complete IRS list of non-profit organizations which have lost their status. The complete link is