IRS delays Cyber Assistant (again)

On May 7, 2010 the IRS announced it would be delaying the release of the on-line program Cyber Assistant.  This long-promised software will allow charitable organizations (including homeschool organizations) to file for 501c3 tax exempt status on-line. The IRS had previously announced that the filing fee would be lowered from $400 (or $850 depending on the organizations annual revenues) to $200 for organizations that filed using Cyber Assistant.

I had several homeschool organizations that were hoping to save $200-$650 by using the on-line filing option.  Unfortunately, it won’t happen in 2010. When will the on-ling filing option be available? No telling. The IRS is not offering a new timeline.

What should your group do now if they want to apply for 501c3 tax exempt status?

Sandy Deja of 501c3Book.org has some good advice (emphasis added by me):

A 501(c)(3) has until the end of the 27th month after it is created to file its exemption application.  If your organization is closing in on the end of its 27 month grace period, you should not wait for the Cyber 1023.  Avoiding the hassles of missing the 27 month deadline is definitely worth the extra money.

Delayed 501(c)(3) Benefits

501(c)(3) status offers a number of benefits other than exemption from Federal income tax: deductibility for contributions, bulk mailing permits, state, local and property tax exemptions, and eligibility for foundation grants, to name a few.  Only you can weigh the $650 discount against the costs of postponing these valuable benefits for your group.

Reputation

In some cases, lost benefits can be recouped once the IRS recognizes 501(c)(3) status.  There is one benefit, though, that once lost may be gone forever: your non-profit’s reputation.  If you think there is any chance your organization will be in the news sometime soon, don’t wait for the Cyber 1023. Savvy journalists check the IRS website when writing articles about local charities.  A news story pointing out that your group has not yet taken care of its IRS paperwork can do lasting damage.

So, in summary, take a look at the date you incorporated as a nonprofit within your state. If you are getting close to the 27 month window, your organization should file for 501c3 tax exempt status now and not wait for the IRS to offer their lower fee by filing through Cyber Assistant.

I can help with your 501c3 tax exempt application. See my Services page for details.

Carol Topp, CPA

Hosting a booth at county fair makes history

The San Diego Christian Homeschools hosted an information booth at the San Diego county fair. It was the first time in the fair’s history that a homeschool organization had been featured there.

Leader Lisa Vaca, wrote to tell me about it:

I just wanted to share with you about how blessed we were to be able to host a homeschool information booth at our County fair yesterday. This all happened thanks, in part, to the encouragement and tips of you, Kristen and Denise (of HomeschoolGroupLeader.com) , and thanks to the huge help of Carol with our non-profit filing last year. (You’re very welcome!)

Our booth was a big hit and the organizers of the non-profit booths at our County fair are begging us to return again next summer. We were able to get HSLDA and other homeschool organizations to send us brochures and publications to hand out, plus we got some of our SDCH kids involved in the photography and displays.

Through this Homeschool Info Booth we were able to introduce homeschooling to our community in a fun, new and positive way, and answer the public’s many questions about home education.

Isn’t that a great idea? The San Diego Christians are reaching out to others in their community to share the benefits of homeschooling.

Carol Topp, CPA

P.S. The San Diego Christian Homeschoolers obtained 501c3 tax exempt status (with my help) which gives them extra credibility in the eyes of their community. Learn the benefits of 501c3 tax exempt status for your homeschool group  in this article Do we need 501c3 status?

IRS starts revoking tax exempt status May 17

Homeschool leaders, if your organization has 501c3 tax exempt status be sure to file your annual Form 990N, 990 EZ or 990 or risk losing your tax exempt status. The IRS is beginning automatic revocation of tax exempt status May 17, 2010.

From USA Today:

Hundreds of thousands of small non-profits, from Little League teams to community soup kitchens, could lose their tax-exempt status on Monday because of an IRS filing requirement.

The 2006 Pension Protection Act included a provision requiring all non-profits to file an annual return with the IRS.

Previously, non-profits with annual revenue of less than $25,000 were excluded. Non-profits that fail to file a return for three consecutive years lose their tax-exempt status. On May 17, the three-year clock runs out for non-profits that haven’t filed a return since 2007.

The Urban Institute estimates that up to 365,000 non-profits could lose their tax-exempt status if they fail to file by Monday. Groups that miss the deadline will have to apply for a new exemption and pay a user fee of up to $850. They could also be liable for taxes on any revenue earned before their exemption is renewed.

The requirement does not apply to churches or church-related operations.

Non-profits with less than $25,000 in annual revenue can file a 990-N, an abbreviated online form. Completing the online form takes less than 10 minutes, says Tim Delaney, president of the National Council of Nonprofits.

What should you do if your organization loses its tax exempt status?  The IRS says you will need to reapply for tax exempt status.

The IRS as a FAQ page.

And I can help.  I assist homeschool organizations with tax exempt applications.  See my Services page for details.

Carol Topp, CPA

Ultimate Homeschool Expo

• Online Seminars with With 35+ Speakers! (I’m one of them!)
  
• Virtual Vendor Hall! (I have a virtual booth there)
  
• Free Gifts–ebooks, audios, downloads! (I’m giving away ebooks, audios and chapters form  my books)
  
• Special offers from your favorite Online Vendors!
• Mp3 Downloads for all audios (over $1,000 in workshops!)

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