Are You Donating to An Illegal Charity?

The IRS recently took away the tax exempt status of several hundred thousand charities.

If you are on the board of a non profit organization, it is critical to make sure that you protect yourself by checking up on the tax status.  As a director, you have personal liability for the oversight of that company.

If you are donating to a charity, your donation is not tax deductible if the charity has lost its tax exempt status.  Your previous donations are still tax deductible but moving forward, it no longer qualifies since these non profits have been cited publicly.

Donation Jar

The Pension Protection Act of 2006 required non profits to file annual tax returns with the IRS starting in 2007.  Since then, the IRS has done outreach to non profits to ensure compliance.  These non profits have been warned since 2010 that they had not filed any returns for three consecutive years.

A revoked list of the non profits who have lost their tax exempt status can be found here.  The list is set up state by state for easy reference in both PDF and Excel format.    Publication No 78 lists non profits organizations but is not reliable.  This must be cross checked against the revoked list.

All is not lost if your non profit was one of the offending organizations.  The IRS will allow reinstatement of the tax exempt status and have provided detailed instructions for that process.

© 2010 MoneyandRisk.com all rights reserved

photo credit: Kevin H

2 comments

  1. That would be frustrating to donate to a charity expecting a tax exemption only to later realize that they did not do the necessary work to maintain their tax exemption status. I wonder how many of those charities didn’t file because they have something to hide.

    1. Despite the IRS extending the deadlines several times, the majority of the deficient charities still did not fill out the necessary paperwork even as of this year.

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