Not-for-profit organizations are different from for-profit businesses in many vital ways. One of the most crucial differences is that under Section 501(c)(3), Sec. 501(c)(7) and other provisions, not-for-profits are tax-exempt. But your tax-exempt status is fragile. If you don’t follow the rules laid out in IRS Publication 557, Tax-Exempt Status for Your Organization, the IRS could revoke it.

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Be particularly alert to the following common stumbling blocks.


Continue Reading Protecting Your NFP’s Tax-Exempt Status

There are many ways for a not-for-profit organization to lose its tax-exempt status — including participating in lobbying and campaign activities, receiving excessive unrelated business income and allowing board members to financially benefit from their positions. But the most common reason not-for-profits lose their status is failure to file an annual Form 990 or 990-N for three consecutive years.

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If your organization has landed on the IRS’s revocation list for this reason, don’t panic. The process for reinstatement is relatively simple.


Continue Reading Need to Regain Tax-Exempt Status for Your Not-for-Profit?

One of the worst things that can happen to a not-for-profit organization is to have its tax-exempt status revoked. Among other consequences, the not-for-profit may lose credibility with supporters and the public, and donors will no longer be able to make tax-exempt contributions.

man in a business suit putting a silver coin into a pink porcelain piggy bank, next to stacks of coins, avoiding excess benefit transactions to keep tax-exempt status

Although loss of exempt status isn’t common, certain activities can increase your risk significantly. These include ignoring the IRS’s private benefit and private inurement provisions. Here’s what you need to know to avoid reaping an excess benefit from your organization’s transactions.


Continue Reading Your Not-for-Profit’s Tax-Exempt Status – How to Keep It