IRS Pulls Exemptions for 29 San Bruno Nonprofits

Twenty-nine local nonprofit organizations with San Bruno addresses lost their tax-exempt status last week.

The New York Times reported that the Internal Revenue Service revoked the status from 275,000 groups after they did not meet legal requirements to file annual tax reports for three consecutive years. 

According to a press release issued by the IRS, it has made several attempts to notify the groups, but the majority of these organizations are believed to be defunct. 

Congress passed the Pension Protection Act in 2006, requiring most tax-exempt organizations to file an annual information return or notice with the IRS. For small organizations, the law imposed a filing requirement for the first time in 2007. In addition, the law automatically revokes the tax-exempt status of any organization that does not file required returns or notices for three consecutive years. 

The IRS also believes the vast majority of small tax-exempt organizations are now in compliance with the 2006 law. “Still, we realize there may be some legitimate organizations, especially very small ones, that were unaware of their new filing requirement," IRS Commissioner Doug Shulman said. "We are taking additional steps for these groups to maintain their tax-exempt status without jeopardizing their operations or harming their donors.”

The IRS issued instructions 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 tax-exempt organizations—those with annual gross receipts of $50,000 or less for 2010—that were made subject to the new "postcard" filing under the Pension Protection Act. 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.

For a complete list of organizations that were revoked, visit the IRS's website.

Correction: This story incorrectly stated that Teamsters Local 856 was among the 29 San Bruno nonprofits that recently lost their tax-exempt status. A now-defunct retirees club with the same address as the Teamsters union was on the IRS's list. Teamsters Local 856 is still active. San Bruno Patch regrets the error.