Charities, nonprofits face Monday IRS deadline

May 16, 2010 at 12:00a.m.

Associated Press

COLUMBUS

Thousands of U.S. charities and other nonprofit groups are up against a Monday deadline to file tax returns with the Internal Revenue Service.

A new federal law requires all nonprofits to file an annual return, including such small groups as 4-H clubs and local athletic clubs. Previously, those with annual revenue of less than $25,000 were excluded.

Groups that fail to file a return for three consecutive years will lose their tax-exempt status, meaning charities might have to start paying taxes on their revenue, and donations to them would no longer be tax-deductible.

The law was designed to ensure the IRS has adequate data to oversee one of the most generous tax breaks the federal government offers.

The Urban Institute estimates that up to 365,000 nonprofits could lose their tax-exempt status if they fail to file by Monday. About 6,300 groups in Ohio are on the list. But some may no longer exist or operate under new names.

The Upper Arlington Lacrosse Association in suburban Columbus knew nothing about the change, said director Rick Petosa.

Nearby, the Olentangy Youth Athletic Association avoided potential disaster when it mailed four years’ worth of delinquent tax returns Wednesday.

Others were caught off guard by the deadline.

“I don’t know what to do right now,” said Nadine Mantle, who started a Dayton charity, Heart for the Homeless, 23 years ago and didn’t know about the rule change until Friday. Mantle said she’s never had to file a tax return because she never brought in enough revenue.

The IRS began sending more than 650,000 letters to small tax-exempt organizations in July 2007, alerting them of the requirement, IRS spokeswoman Jodie Reynolds said.