Entities lose Non Profit Status

275,000 orgs lose tax-exempt status


Approximately 275,000 organizations have automatically lost their tax-exempt status under the law because they did not file legally required annual reports for three consecutive years.
-The IRS announced special steps to help any existing organizations to apply for reinstatement of their tax-exempt status.
-The IRS issued guidance in mid-June on how organizations can apply for reinstatement of their tax-exempt status, including retroactive reinstatement. In addition, the IRS announced transition relief for certain small organizations - those with annual gross receipts of $50,000 or less for 2010 - that are subject to the new "postcard" filing. The relief allows eligible small organizations to regain their tax-exempt status retroactive to the date of revocation and pay a reduced application fee of $100, rather than the typical $400 or $850 fee. Full details are available in Notice 2011-43, Notice 2011-44 and Revenue Procedure 2011-36.
-If an organization appears on the list of organizations whose tax-exempt status has been automatically revoked, it is because IRS records indicate the organization had a filing requirement and did not file the required returns or notices for 2007, 2008 and 2009. The list, which will be available on the IRS Web site at www.irs.gov, includes each organization's name, Employer Identification Number and last known address. It is searchable by state. The IRS will update the list monthly.
-This listing should have little impact on donors who previously made deductible contributions to auto-revoked organizations, because donations made prior to an organization's appearance on the list remain tax-deductible. Going forward, however, organizations that are on the list that do not receive reinstatement are no longer eligible to receive tax-deductible contributions, and any income they receive may be taxable.
-Publication on the list of organizations whose tax-exempt status has been revoked serves as notice to donors and others that they may no longer rely on a prior listing in IRS Publication 78, Cumulative List of Organizations, as an indication of an organization's tax-exempt status or its eligibility to receive tax-deductible contribution

Tax Advantages for the Military

Tips to Ease Tax Time for Military

Military personnel have some unique duties, expenses and transitions. Some special tax benefits may apply when moving to a new base, traveling to a duty station, returning from active duty and more. These tips may put military members a bit “at ease” when it comes to their taxes.

-Moving Expenses, If you are a member of the Armed Forces on active duty and you move because of a permanent change of station, you can deduct the reasonable unreimbursed expenses of moving you and members of your household.
-Combat Pay, If you serve in a combat zone as an enlisted person or as a warrant officer for any part of a month, all your military pay received for military service that month is not taxable. For officers, the monthly exclusion is capped at the highest enlisted pay, plus any hostile fire or imminent danger pay received.
-Extension of Deadlines, The time for taking care of certain tax matters can be postponed. The deadline for filing tax returns, paying taxes, filing claims for refund, and taking other actions with the IRS is automatically extended for qualifying members of the military.
-Uniform Cost and Upkeep, If military regulations prohibit you from wearing certain uniforms when off duty, you can deduct the cost and upkeep of those uniforms, but you must reduce your expenses by any allowance or reimbursement you receive.
-Joint Returns, Generally, joint returns must be signed by both spouses. However, when one spouse may not be available due to military duty, a power of attorney may be used to file a joint return.
-Travel to Reserve Duty, If you are a member of the US Armed Forces Reserves, you can deduct unreimbursed travel expenses for traveling more than 100 miles away from home to perform your reserve duties.
-ROTC Students, Subsistence allowances paid to ROTC students participating in advanced training are not taxable. However, active duty pay – such as pay received during summer advanced camp – is taxable.
-Transitioning Back to Civilian Life, You may be able to deduct some costs you incur while looking for a new job. Expenses may include travel, resume preparation fees, and outplacement agency fees. Moving expenses may be deductible if your move is closely related to the start of work at a new job location, and you meet certain tests.

Additional Childcare Tax Credit Opportunity

IRS Says Summer Day Camps May Qualify for Tax Credit


The Internal Revenue Service said Wednesday that parents may be able to qualify for a tax credit to help defray the added expenses of summer day camp for their children.

Many parents who work or are looking for work must arrange for care of their children under 13 years of age during the school vacation, the IRS noted.

The Child and Dependent Care Credit is available for expenses incurred during the summer and throughout the rest of the year. However, the IRS noted that the cost of day camp may count as an expense towards the child and dependent care credit. Expenses for overnight camps do not qualify. Whether the child care provider is a sitter at the family’s home or a daycare facility outside the home, parents will get some tax benefit if they qualify for the credit.

The credit can be for up to 35 percent of the qualifying expenses, depending on the parents’ income. Parents may use up to $3,000 of the unreimbursed expenses paid in a year for one qualifying individual or $6,000 for two or more qualifying individuals to figure the credit.