Beth Fitzgerald joined NJBIZ in October 2008 after 34 years a beat reporter, business writer and business editor at the Star-Ledger in Newark. An NJBIZ deputy editor and reporter, Beth covers a wide range of issues facing New Jersey businesses, including the rising cost of health coverage and the availability of finance and credit. 
The Internal Revenue Service on Monday gave an estimated 325,000 U.S. nonprofits — including nearly 10,000 in New Jersey — until Oct. 15 to file with the agency and avoid losing their tax-exempt status.
On a conference call Monday morning, agency Commissioner Doug Shulman said the IRS realized it is “important to give the small organizations the opportunity to preserve their valuable tax exemption[s].”
Nearly 10,000 New Jersey nonprofits are on a state-by-state list of groups at risk of losing their tax-exempt status.
Shulman noted that in 2006, Congress mandated all tax-exempt organizations, except churches, had to file annual returns with the IRS, starting with 2007. “This meant a very small organization that has never filed before would have to start doing so,” Shulman said. Nonprofits with revenue of less than $25,000 had not had to file with the IRS; now they must file form 990N, and were given until May 17, 2010 to file the three years of forms.
Although the penalty of losing tax-exempt status didn’t kick in until this year — and even though the IRS sent out about 1 million notices — about 325,000 nonprofits still have not complied, according to the agency.
Heather Robinson, executive director of Partnership in Philanthropy, in Chatham, a nonprofit that provides consulting services to nonprofits, said the extension “gives them an opportunity to be even more transparent and to best present their financial results. Given all of the circumstances that nonprofits are dealing with currently, it behooves the IRS to give them more time.”
Robinson said New Jersey has many under-$25,000 nonprofits that “are founder-driven organizations representing one person’s passion to make a difference.”
Linda Czipo, executive director of the New Jersey Center for Nonprofits, said of the state’s 31,000 nonprofits, thousands are small groups filing with the IRS for the first time. She remains concerned that many nonprofits may indeed lose their tax-exempt status, and have to reapply or shut down as a result.
The extension, “is very, very good news,” she said. “There are a lot of people trying to get the word out, but clearly many were missed.”
E-mail Beth Fitzgerald at bfitzgerald@njbiz.com
