950 LI charities could lose tax-exempt status

About 950 charities in Nassau and Suffolk counties that operate on a calendar year basis are slated to have their tax-exempt status revoked by the IRS unless they file a version of Form 990, the annual reporting form for nonprofits, by Monday.

While some of the nonprofits this affects may be defunct, there is also a significant number that simply haven't filed their returns for a variety of reasons.

"If you've been functioning for 20 years, and you've never had to file a tax return, and then all of a sudden they put in a requirement to put in a 990N . . . you can get caught in the crosshairs of this," said Ken Cerini, managing partner of Cerini and Associates, a Bohemia-based accounting firm that deals extensively with nonprofits.

Despite what the IRS says has been a widespread outreach program to inform nonprofits of the requirement, several affected nonprofits on Long Island expressed surprise and shock that their 501(c)(3) status could be in danger.

"I was under the impression a long time ago that [nonprofits] just lasted forever," said Malcolm Frazier, a sculptor and committee member of the Lost At Sea Memorial Fund in Southold, a nonprofit that erected a statue to fallen fishermen on the East End in 1998.

Nina Trischitta, president of AFC-Ferret Rescue in North Babylon, said she lost sleep after hearing that her organization could lose its nonprofit status. Because the group receives less than $25,000 a year in donations, she thought it didn't have to file returns.

"We're 13 years old - we don't want to lose what we gained," said Trischitta, who planned to take care of the matter.

The requirement to file or face revocation was tucked into a pension bill that Congress passed in 2006, and which took effect in 2007.

While nonprofits that have annual gross receipts of less than $25,000 had a grace period for two years, the law required them to file the short Form 990N for fiscal year 2009. Previously, such small charities didn't have to file a yearly return.

About 1,600 nonprofit charities on Long Island have not filed a version of IRS Form 990 for the past three years, according to information from the National Center for Charitable Statistics. A charity has five months and 15 days from the end of its fiscal year to file a return. Charities can operate on a calendar year basis or on a fiscal year basis, so about 650 Long Island charities that have not filed for three years have later deadlines.

Lois G. Lerner, director of the Exempt Organizations Division of the IRS, said there will be no grace period for nonprofits that haven't filed for the past three years. The IRS will begin announcing revocations early next year, she said.

The duty to file is reasonable, even for smaller nonprofits, said Ann Marie Thigpen, director of the Long Island Center for Nonprofit Leadership at Adelphi University.

"You still have a responsibility when you're given that nonprofit status," she said. "You're given breaks and there's a responsibility attached to them."