Thousands of charities in Indiana have taken a hit because of a technicality. It’s an issue that Senator Dan Coats (R-Ind.) and Congressman Todd Young (R-Ind.) are working to correct.
The two Indiana Republicans made a stop in the Wabash Valley Tuesday to discuss legislation supporting Indiana Charities.
No matter how big, or how small–charities of every size must file annual information returns with the IRS. Very small charities used to not have to do this. It’s a recent change to the law within the past few years.
Failure to file annual information returns for three consecutive years results in the IRS revoking the charity’s tax-exempt status, which can be a huge problem for many smaller non-profits that may not be aware of the deadline.
It’s a severe penalty that results in the charity having to re-apply for their tax-exempt status. The application process could take months, or even years for the IRS to complete.
Senator Coats and Congressman Young want to help those charities with the Notice Act. It’s legislation that would require the IRS to notify non-profits of this deadline, before their tax-exempt status is revoked.
“All of this causes complication, and resources for organizations that really just want to serve their local communities. We improve that by providing notice to these people that their tax-exempt status could be revoked if they don’t file their proper paper work,” says Congressman Young.
The Notice Act has been passed by the Senate Finance Committee in two separate vehicles, and is now waiting action by the full senate.