May 8, 2010; The Anchorage Daily News | A 2006 law, The Pension Protection Act of 2006, states that nonprofits that do not file their form 990 for three years in a row could lose tax-exempt status. This law affects all nonprofits, even those previously not required to file the form. This year marks the third year since the law took effect and therefore the potential D-day for many groups across the country. NPQ will provide a more in-depth story written in partnership with the Minnesota Council of Nonprofits and the National Center for Charitable Statistics early this week.
The Foraker Group, a group focused on helping Alaska Nonprofits, says that 1,000 nonprofits in that state have yet to file their 990 form with the IRS. And according to this story from North Dakota, 2,000 groups in that state have yet to file. This story from Mankato, Minnesota says there are 400,000 groups nationwide that have not filed. This new law makes for sensational headlines but it’s relatively easy to avoid the drama.
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The Austin, Minnesota paper, The Austin Daily Herald mentioned the rationale behind the law in a 2007 New York Times article, which is to weed out non-functioning nonprofits. In some states, like Minnesota, the state associations are playing a critical role in getting the information about the deadline and the law to groups across their state.—Kristin Barrali