IRS Looks To Make The Non-Profit A Non-Factor

Senator Kevin Lundberg Watches Out For The Little Guy

Loveland, CO., April 27, 2012 – Colorado State Senator and U.S. Congressional Candidate, Kevin Lundberg, has introduced a measure in the Colorado State Senate urging Congress to fix IRS regulations that has revoked the tax-exempt status of a large number of small non-profit charities across the country.

Senator Kevin Lundberg said, “Tens of thousands of non-profits across the country have been put out of business because the IRS changed the rules and didn’t give them proper notice. Congress needs to fix what they have broken.”

Lundberg’s measure urges Congress to fix IRS reporting procedures for small non-profit organizations to ensure that their tax-exempt status would not be unfairly revoked.

Since 2006, over 400,000 non-profit organizations have had their tax-exempt status revoked, many of which because of this poorly executed addition to the U.S. Internal Revenue Code.

In 2005, a report was issued to Congress by the Panel on the Non-Profit Sector and recommended that small non-profit organizations be required to submit an annual report to the IRS. The panel’s recommendation stated that organizations that do not comply within a reasonable amount of time should have their tax-exempt status suspended.

In 2006, Congress adopted the Pension Protection Act that was based in part on the panel’s recommendations. The act requires that an affected organization’s tax-exempt status “be considered revoked” after failing to file a report for three consecutive years, even though the panel’s recommendation was that the organization’s status only be suspended.

The new and unfamiliar filing regulations were poorly executed and poorly communicated. The IRS claimed that they would send notifications to affected organizations prior to any revocation of their status. The truth is that many were not contacted until after the fact, and in some cases had to simply shut their doors because they were no longer in compliance.

Although it is not unreasonable to expect non-profits to submit such a report, it is only fair that they be given proper notice. And in the case that their tax-exempt status is revoked, they ought to be afforded a simple process to become compliant and regain their prior status.

In a society where government entitlement programs are growing out of control, small non-profits provide a valuable service to their communities and should be allowed to operate without undue regulation from the federal government. It is time to send someone to Washington who will focus on protecting our liberty and our freedom rather than eroding the principles of self-responsibility by over-regulation.

The complete measure Senator Lundberg has introduced can be found at: http://www.leg.state.co.us/clics/clics2012a/csl.nsf/fsbillcont/D4605D343E364AAA872579C600650A46?Open&file=SJM003_01.pdf