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 Post subject: Check Your Non-Profit Status
PostPosted: Thu Jan 09, 2020 3:13 pm 

Joined: Sun Aug 22, 2004 1:51 pm
Posts: 9369
Location: Somewhere east of Prescott, AZ along the old Santa Fe "Prescott & Eastern"
In the past two weeks, I have received news from no less than three non-profits with which I have had involvement (thankfully in this case, not rail-related) that have had to temporarily shut down operations of whatever sort (including their ability to accept donations) because they had been notified by the IRS that their non-profit status had been officially revoked. In all three cases, the reason was that individuals responsible for filing the appropriate paperwork had failed to follow up on said forms with annual submission--in all three cases I describe, for three years in a row.

In one case, it was most likely just ignorance of the requirements. In another, I know a treasurer who was up on the law had died, and his position assumed by another member who may not have known the requirements. I'm not informed on the third instance.

It's apparently possible for all three, and anyone else who lets this lapse, to re-file for both reinstatement of non-profit status and retroactive non-profit status--at least all three claim to be doing so. But this takes time. The one that gave an estimate told me that they had been advised that this could take six to eight MONTHS.

Imagine not being able to offer rides or open your museum for the summer.

This serves as a reminder that ANY association, group, society, etc. needs to compile, and keep updated, a manual of regular paperwork to be filed, renewed, obeyed, etc., and a designated representative assigned to see that said tasks are done--be it by a president, an executive director, a secretary, a treasurer, a VP of Operations, a paid accountant or lawyer, or even (I hope I joke) a vice president of Bureaucracy.

In two (other) organizations to which I belong or have belonged, the positions responsible for these duties have fallen to "career bureaucrats" whose major function in the group is precisely to mud-wrestle with such paperwork. Every January, at an official board of directors meeting, the one would go around the table with "Okay, EVERYONE read and sign this one, it's the bonding insurance for the officers; President and VP sign this for the IRS; this is the annual state tax remittance, review for any issues and treasurer signs; here's the annual token fee for our attorney retainer, it's a bargain....."

Do it. Don't assume. Double-check. Libraries have manuals for non-profits if you're not sure what you're doing. And you pay accountants and attorneys (or get the services of one donated) to tell you what you don't know about or might have forgotten.


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 Post subject: Re: Check Your Non-Profit Status
PostPosted: Thu Jan 09, 2020 8:37 pm 

Joined: Fri Sep 20, 2013 2:34 pm
Posts: 130
Alexander D. Mitchell IV wrote:
It's apparently possible for all three, and anyone else who lets this lapse, to re-file for both reinstatement of non-profit status and retroactive non-profit status--at least all three claim to be doing so. But this takes time. The one that gave an estimate told me that they had been advised that this could take six to eight MONTHS.


I am aware of a township historical society that also just had this happen. Be aware that in addition to the time involved, the IRS charges a $250 fee for reinstatement.


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 Post subject: Re: Check Your Non-Profit Status
PostPosted: Fri Jan 10, 2020 1:44 pm 

Joined: Sun Aug 22, 2004 8:51 pm
Posts: 1742
Location: Southern California
California -- and maybe other states -- require a biannual (not annual) listing of key officers and the Agent for Service. This listing is a public record and available online. If this is not received the corporation's status can be suspended and so reported online.

_________________
Brian Norden


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 Post subject: Re: Check Your Non-Profit Status
PostPosted: Fri Jan 10, 2020 9:15 pm 

Joined: Thu Nov 22, 2007 5:46 am
Posts: 2561
Location: S.F. Bay Area
I'm aware of an organization that fired its longtime director, only to discover that director had left them a parting gift: no 990 filings for 3 years straight. The organization started into the lengthy reinstatement process, only to find out the fired director *had done it for them*. Not even maliciously. WTH.

And then five years later, the organization came within about 2 months of doing it *again*, assuming IRS counts that 3rd year 8868 extension as part of the time.


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