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By MOLLY HOTTLE
updated 6:49 p.m. ET, Sat., May 15, 2010
DES MOINES, Iowa - More than 200,000 small nonprofits across the nation are days away from losing their tax-exempt status because they haven't filed a new form with the Internal Revenue Service.
Many of these groups already operate on razor-thin budgets and some worry an unexpected tax bill could force organizations to close.
"The nonprofits in your backyards, some of them are going to be gone," said Suzanne Coffman, a spokeswoman for GuideStar, which tracks data on nonprofits.
It's most likely the nonprofits aren't aware of the Monday deadline that only applies to groups that report $25,000 or less in income, excluding churches. Those organizations may not find out until Jan. 1, 2011, when they're notified they have to pay taxes on donations they thought were exempt. And it could be months before their nonprofit status is restored.
The NCCS, which maintains data on the nonprofit sector in the United States in collaboration with the IRS and other government organizations, reported that as many as 365,000 small nonprofits nationwide are in danger of losing their tax-exempt status after Monday's deadline.
But the IRS released a statement late Tuesday afternoon from Commissioner Doug Shulman giving nonprofits who missed the filing deadline a reprieve.
"The IRS has conducted an unprecedented outreach effort in the tax-exempt sector on the 2006 law's new filing requirements, but many of these smaller organizations are just now learning of the May 17 deadline," Shulman said in the statement.
"I want to reassure these small organizations that the IRS will do what it can to help them avoid losing their tax-exempt status."