Post by anncoulter on Jun 15, 2011 11:05:48 GMT -5
IRS cracks down, revokes thousands of tax exemptions
More than 5,000 Minnesota nonprofits lost tax-exempt status last week, when the IRS cracked down on groups that hadn’t filed tax returns for three consecutive years.
By Katherine Lymn
2011 / 06 / 15
Cheryl Reitan had a headache to deal with Friday.
The Internal Revenue Service seemed to say the entire University of Minnesota-Duluth lost its tax-exempt status, meaning donations to the school were no longer tax-deductible.
“W are not very happy about that, and our donors are like ‘What’s going on?’” said Reitan, a spokeswoman for UMD. “We’re just completely insane about that little notice.”
Reitan was quick to clarify: IRS data actually referred to the UMD Literary Guild — not the entire satellite campus of the University. She said her office would be sending a press release to clarify.
The guild is one of more than 5,000 Minnesota nonprofits to lose tax-exempt status last week, when the IRS cracked down on groups that hadn’t filed tax returns for three consecutive years. It’s the result of a 2006 law that required nonprofits making less than $25,000 a year to file returns, in efforts to better follow such groups.
Greek life groups were at risk of losing their status because of high turnover in management, Jeff Narabrook of the Minnesota Council of Nonprofits told the Minnesota Daily previously, but only defunct fraternities and sororities of the University showed up on the list.
Jokondo Jokondo, president of Omega Psi Phi fraternity, said his group will need to find more ways to make money because they now can’t use tax-exempt status for discounts when catering events or making other large purchases.
Lindsay Nichols of nonprofit tracker GuideStar said this is the way the status change will impede groups the most — it will be generally harder to attract donations and grants. Plus, reapplying for tax-exempt status takes time and money.
Jokondo said since the overarching Omega Psi Phi still has the status, the University campus chapter is working on regaining its own.
“It is what it is,” Jokondo said. “We’re just working through it.”
Multiple Minnesota chapters of the Tau Kappa Epsilon fraternity are also no longer tax-exempt, but members of the University chapter could not be reached for comment.
Other college chapters of fraternities and sororities — most appear to already be defunct — are also on the revocation list.
Nichols said the crackdown will help the IRS learn more about active nonprofits.
“We’re going to get a real look at how big the sector is, how much influence we have,” she said. “… we just really didn’t have that before.”
www.mndaily.com/2011/06/15/irs-cracks-down-revokes-thousands-tax-exemptions
More than 5,000 Minnesota nonprofits lost tax-exempt status last week, when the IRS cracked down on groups that hadn’t filed tax returns for three consecutive years.
By Katherine Lymn
2011 / 06 / 15
Cheryl Reitan had a headache to deal with Friday.
The Internal Revenue Service seemed to say the entire University of Minnesota-Duluth lost its tax-exempt status, meaning donations to the school were no longer tax-deductible.
“W are not very happy about that, and our donors are like ‘What’s going on?’” said Reitan, a spokeswoman for UMD. “We’re just completely insane about that little notice.”
Reitan was quick to clarify: IRS data actually referred to the UMD Literary Guild — not the entire satellite campus of the University. She said her office would be sending a press release to clarify.
The guild is one of more than 5,000 Minnesota nonprofits to lose tax-exempt status last week, when the IRS cracked down on groups that hadn’t filed tax returns for three consecutive years. It’s the result of a 2006 law that required nonprofits making less than $25,000 a year to file returns, in efforts to better follow such groups.
Greek life groups were at risk of losing their status because of high turnover in management, Jeff Narabrook of the Minnesota Council of Nonprofits told the Minnesota Daily previously, but only defunct fraternities and sororities of the University showed up on the list.
Jokondo Jokondo, president of Omega Psi Phi fraternity, said his group will need to find more ways to make money because they now can’t use tax-exempt status for discounts when catering events or making other large purchases.
Lindsay Nichols of nonprofit tracker GuideStar said this is the way the status change will impede groups the most — it will be generally harder to attract donations and grants. Plus, reapplying for tax-exempt status takes time and money.
Jokondo said since the overarching Omega Psi Phi still has the status, the University campus chapter is working on regaining its own.
“It is what it is,” Jokondo said. “We’re just working through it.”
Multiple Minnesota chapters of the Tau Kappa Epsilon fraternity are also no longer tax-exempt, but members of the University chapter could not be reached for comment.
Other college chapters of fraternities and sororities — most appear to already be defunct — are also on the revocation list.
Nichols said the crackdown will help the IRS learn more about active nonprofits.
“We’re going to get a real look at how big the sector is, how much influence we have,” she said. “… we just really didn’t have that before.”
www.mndaily.com/2011/06/15/irs-cracks-down-revokes-thousands-tax-exemptions
