You donate goods or money to a charity and you trust you can take a deduction on your taxes. But that may not always be the case.
This month, look for a long list of organizations that have lost their tax exempt status on the Internal Revenue website. The IRS has started to post a more up-to-date list of those who've had their tax exempt status automatically revoked for not filing the proper paperwork.
"Now they're required to fill out that 990 form every year. If they haven't for three years, we do what we call an auto revoke of their privileges as a tax exempt entity," Karen Connelly of the IRS said.
In the past, the IRS waited six months to release the names of the organizations that no longer hold charity status; now it will put the names on a month after the group has lost its exemption.
"Part of that law is to reign all that back in and to let donors know they are actually writing a check to a charity they can write off on their taxes," Connelly said.
Many of these groups are defunct, but they can apply to get their charity status reinstated.
"You may see an entity on there that has since applied for reinstatement and they should have that determination letter to show to you and you'd know they'd been reinstated," Connelly said.
The whole process started after Congress passed a law in 2006 that gave groups with annual revenue of $25,000 or less three years of tax-filing deadlines to comply. Charities may not even know until the IRS posts the list that they've lost their tax exempt status, so getting it online sooner can make a big difference for both the charity in question and you as a donor to know whether you can take the deduction.
