By Brenna Angel
http://stream.publicbroadcasting.net/production/mp3/wuky/local-wuky-974563.mp3
LEXINGTON, Ky. – As of this month, more than 3,100 nonprofit organizations in Kentucky are without their tax-exempt status because of a federal law passed in 2006. Danielle Clore, Director of the Kentucky Nonprofit Network, says it was an effort by the IRS to do some house cleaning.
"We just had so many organizations who had not ever had to communicate with the IRS because if they had gross receipts under $25,000 they did not have to file any kind of informational return with the IRS. So this law changed that."
Clore says many of the organizations are no longer active or merged with other groups, but some simply forgot to file their IRS Form 990. Around 1,000 Kentucky nonprofits did file with the IRS before the deadline.
The thousands of nonprofit organizations that lost their tax-exempt status represent a wide range of interests, including county fair associations, American Legion chapters, and religious groups.
Losing the special status means the organizations' income is taxable and donations to them are no longer tax-deductible.
"We maybe have heard from about 25 organizations out of that over three thousand who were in a panic and saying 'uh oh we're on this list and didn't intend to be.' So we have encouraged them to do a lot of the leg work and background work and research to try to figure out how to best get themselves back into good shape with the IRS."
Click here to view a list of affected nonprofits.