U.S. Supreme Court Decision in Citizens United v Federal Election Commission
In January 2010 the Court issued a decision in a case that arose out of Michigan challenging corporate limitations on contributions to political campaigns. The Court decision has no immediate or significant impact on charitable organizations that are exempt under Section 501(c)(3) of the Internal Revenue Code. The prohibitions on political expenditures are unchanged. For a more detailed discussion of this case, see MNA's new Michigan Nonprofit Management Manual, 5th Edition, Chapter 16, Lobbying and Political Activity, available at MNA's online bookstore. The Web site for Independent Sector also discusses the opinion and its impacts.
IRS Reporting for Small Charities
All charities are now required to report annually to the IRS, regardless of size. While this requirement was implemented in 2008, it remains on this page because it is of such great significance to small nonprofits. The failure to file this form will result in revocation of the organization's tax exempt status. In the past, charities with gross annual receipts less than $25,000 had no annual reporting requirement and were asked to report only when they received a form from the IRS. This has changed. Charities that are not required to file the Form 990-EZ or the full Form 990 must file Form 990-N (e-Postcard). This requirement is in effect for fiscal years beginning on or after January 1, 2007. So the first 990-N filing requirements will be May 15, 2008. Read more at the IRS website or go to the Urban Institute website to file the new form.
Failure to File IRS Annual Reporting Form will result in revocation of exempt status
Under the provisions of the Pension Protection Act of 2006, charities that fail to file with the IRS for 3 years will automatically lose their tax exempt status, unless they fall under a specific exemption. For example, churches are exempt from filing requirements. Organizations that lose their exempt status must reapply and pay the required filing fees to reinstate tax exempt status. For more information see the IRS Web site.
