http://taxprof.typepad.com/taxprof_blog ... rips-.html



This amounts to approximately 14 per cent of the 501(c)3's the IRS acknowledges the existence of.

An update to this news notes that this is causing major problems, and it's not always the nonprofits' faults:

http://philanthropy.com/article/IRS-s-M ... se/127894/



Here's the list, broken down by states. It would be wise for the responsible party in your organization to check the list to assure that your group hasn't been dropped off the list for whatever reason. In classic bureaucracy style/stereotype, folks are reporting problems with the links and/or the ability to open the files in question. In Pennsylvania alone I found two "railroad museums" (one a postal address for a "Railroad Museum of South Jersey" I have never heard of before), a model railroad club, an NRHS chapter (Hawk Mountain), and three railroad union locals. In Maryland I found two now-defunct rail preservation projects, including one which I believe was dissolved over a decade ago:

http://www.irs.gov/charities/article/0, ... 99,00.html

EDIT: PLEASE NOTE: Go so far as to actually procure the ACTUAL tax-exemption registration number and double-check against it. I just now found one possible "friends of" rail group that is, if I'm correct and it is who I think it is, listed as an abbreviated or shortened version of the name that leaves off the critical last two words, "Railroad Museum," and thus doesn't show up in a normal search for "rail" or "railroad." I've also found numerous egregious typos for other organizations, including the Hawk Mountain "Railway Histriocal". Paranoia is thus now justified. Go think of ANY way you can think of to find your group.

Good luck.

I noticed that Massachusetts Operation Lifesaver lost its status along with 216 pages of other organizations. I wonder if the FRA knows about that.

Quite amusing are dozens of locals of the Massachusetts Teachers Association included in the list. I guess business education doesn't rate very highly these days.

PC

Although I can't speak for Massachusetts, almost nothing was taught in my high school business classes with regards to non-profit corporations.

Derail,

There are going to be some unhappy folks in NJ and PA. Checked the list to see if any organizations I am closely involved in are on it. I didn't find the ones I was looking for, but there are many historical groups and model rr clubs on the list.

Rob

Among the groups which lost its non-profit status was the Electric Railway Historical Society, merged into IRM in the early 70's

Jeff

OT - The groups I know of in Maryland DC are in the clear, but I also found this gem:
NATIONAL TOILET RENTAL ASSOCIATION

Wesley

I filed Electronic form 990s for one of my clubs. 2007 and 2009 went fine, but the computer would never accept 2008 and eventually the I.R.S. sent a dunning and warning notice, mentioning that if this went on for 3 tears, we would lose our status. When I finally talked to an I.R.S. person, he couldn't fix the their computer, but said it didn't really matter, as the successful 2009 filing postponed the 3 year "clock".

Two comments

1)

"Among the groups which lost its non-profit status was the Electric Railway Historical Society, merged into IRM in the early 70's"

Say what ? It didn't lose it's 501c3 status, it ceased to exist by merging into another organization.

2) You can use the following link to determine if a non profit is currently tax exempt (and thus check whether your 990 'made it'!)


http://www.irs.gov/charities/article/0, ... 36,00.html

Bob H

But I would guess no one filed the paperwork with the IRS to disolve the company and its been carried on the books since that time.

Guess this is a good way for the IRS to clean house

Actually, ERHS likely continued to exist in some form until at least the 1990s and possibly even into the early 2000s, though I have no idea when last anyone filed any paperwork with the IRS. Although the organization's collection of rolling stock was transferred to IRM in 1973, the book inventory remained in the hands of a reconstituted ERHS board. A history of ERHS can be found here: http://hickscarworks.blogspot.com/2009/01/erhs.html

I suspect the vast majority of these groups are long, long defunct, and NOBODY cares.

There may be a few who didn't get the word, and are coasting on belief that small groups don't need to file Form 990s. I doubt there are very many. In any case, I don't believe they're barred from ever being a nonprofit again, are they? This hasn't undone their corporation status, only their nonprofit status. It's only been 13 months.

IANAL, but my SWAG here is those groups could simply file another Form 1023 (steam engines have Form 4's, nonprofits have 1023s.) IRS gives you 27 months to file Form 1023 (in fact they encourage you to take at least 12 and preferably 24 so you can report actual financials rather than projected). Until you file, you are allowed the benefits of a nonprofit, as long as you continuously look walk and quack like a nonprofit.

Another reason to put off filing a 1023 is that IRS is planning to cut the filing fee from $850 to $200, once they roll out their e-"file" scheme for it. It's a really big form and lots of places to bungle it, especially if you're trying to promote a nonprofit for illegal purposes.


Well, yeah... high school does not teach financial education. If they did, they'd have endless wars with parents, who have their own strong feelings about money (most of which are debatable, or wrong).


IANAL, but consider the word "file". As opposed to "submit". You file a grievance, you file a lawsuit. The other party is compelled to accept it. The court clerk cannot refuse your lawsuit. The IRS, likewise, is compelled to accept your tax return as you wrote it, even if it's wrong. (they can administratively adjust it, but you can challenge that.)

Filing also means being ready for another party's claim that you didn't file. Hence filing generally includes proof; the little green papers from the post office, court clerks giving you reciepts, etc. Now, you get into this "electronic so-called filing", that is not filing at all. It is a gentleman's agreement; IRS agrees that if you play electronic pattycake (which helps them save costs), they agree to treat it as if you filed. But that agreement can go wrong. Since it is not filing, they can refuse/reject it. Even after the fact, which has blindsided many consumer e-"filers". Bottom line, you didn't file! And there you are in tax court, and it's your word against the IRS that you tried. Now what?

I'm not saying don't e-"file", I'm saying make sure your organization can endure an e-"file" that disappears in the ethernet. For instance I would actually file my 990 every 3rd year.


A state creates a corporation. The Feds merely make it nonprofit. And only there it can be unmade. Lose your nonprofit status, your corporation is alive, but with a hell of an inurement problem. However some states also have annual reporting requirements, and neglecting to report can get your corporation disbanded. If you haven't filed with the Feds in 4 years...

Actually, the incorporation papers make the corporation non-profit. Fedzilla merely determines tax status for federal taxes, which many states also recognize for income tax purposes.

Mike

Ladies and Gents:

I don't have the time or patience or to debunk all the errors in this thread, and I'm pretty sure if I selected the worst and dismissed them with the dismissal they deserved, I'd get the usual suspects' panties in an indignant and lachrymose bunch. Instead, I'll spare those tender sensitivities.

Instead, I'm picking one to illustrate the point:

"A state creates a corporation. The Feds merely make it nonprofit."

WRONG. States recognize a corporation, AND its charitable nature. (The state recognition may confer exemption from state income or sales taxes) and it will be subject to whatever state regulation applies to charitable organizations, including regulations on organization, fundraising, etc.

The IRS recognizes certain formal and operational attributes of an organization (there is no federal tax requirement for a 501(c)(3) to be a corporation, but a variety of reasons it's generally the form of choice) and that (ongoing) recognition attained by meeting IRS organizational and operating requirements allows the organization to be generally exempt from federal income tax, and allows its donors to claim allowable deductions from federal income tax liability for their contributions.

Losing tax exempt status from the IRS may cause the incurrance of a federal tax liability for the organization and disallowed federal income tax deductions by donors, that's all. (Practically, its like running a 100 yard dash against the roadrunner with an ACME anvil).

If your organization appears on this list, consult a qualified tax adviser. Qualified tax advisers admitted to practice before the IRS by "Circular 230" are attorneys, CPA's and Enrolled Agents. All require training beyond high school, so nobody should be surprised by the lack of inclusion of these topics in HS curricula.

I find it interesting that the Pennsylvania Bar Association appears on the PA list. It makes me think recent reports of control issues at the IRS might be affecting the Exempt Organizations (EO) division and that there might be false positives.

Unfortunately, the number of errors in this thread renders in wholly unreliable.

That having been said, the initial post is worth reading, however, after that, all bets are off.

Unlike other posters, I am a CPA and am Circular 230 qualified.

From my experience, I can tell you that it is possible to NOT appear on both the list of active non-profit organizations and the list of dropped organizations. I believe this can happen when you have not filed for a while and then filed within the three year deadline. Or there may be some other reason.

Common sense suggests that if your group is in this situation, they should file all outstanding returns before inquiring about their status. If you file using paper forms, take it to the local IRS office in person and get a receipt.

-Mark

From my experience, I can tell you that it is possible to NOT appear on both the list of active non-profit organizations and the list of dropped organizations. I believe this can happen when you have not filed for a while and then filed within the three year deadline. Or there may be some other reason.

Common sense suggests that if your group is in this situation, they should file all outstanding returns before inquiring about their status. If you file using paper forms, take it to the local IRS office in person and get a receipt.

Actually, common sense is to understand that the automatic revocation is a NEW action, with NEW and SPECIFIC remedies, so whatever you think you know from past experience does not apply here.

Here's the IRS' (very short) summary of possible remedies. The specific remedy will depend on whether you made the list in error and the size of the organization.
[url]
http://www.irs.gov/charities/article/0, ... 84,00.html[/url]

If you are in this situation, you don't just go to the IRS and get a receipt. At the risk of being blunt, don't be stupid and follow the "advice" here. See an attorney, CPA or Enrolled Agent. Just as you need experience and a license to operate a locomotive, the same applies in legal and tax matters.