TaxEsqBlog -by Ronald J. Cappuccio, J.D., LL.M.(Tax)

All non profit organizations, including local Little Leagues, must file annually with the IRS. If the 990 is not filed, the Local Little League will lose its tax exempt status. See Notice

Nonprofit organizations that do not file 990's can lose their exempt status. Previously, only nonprofit organizations that have more than $25,000 of income had to report. Now all month profits must report. The IRS is trying to promote the concept of this is to protect donors but in reality it just makes it much harder for a small nonprofit to remain in existence. If you are a small nonprofit organization you must contact your tax lawyer right away to make sure you do not lose nonprofit status.

Filing the revised IRS form 990 is a big burden for Non Profits. Many non-profits are now being required to maintain more sophisticated records and to do complex tax compliance. I anticipate Nonprofits and Churches will be subject to heightened IRS scrutiny and IRS and State Tax audits. Click here for an interesting article .

The Internal Revenue Service has an onerous and expensive 2-step process for approval of exempt organizations. Because of the new IRS 990 annual filing requirement for non-profits, the IRS is changing the process. Instead of giving a 5-year preliminary approval requiring a review after 5 years to demonstrate the charity receives public support, the initial letter in now a final "Letter of Determination." This will eliminate the review but does not make up for the extra work of filing the 990,