Those who run nonprofit youth sports organizations need to be aware of the impact of federal legislation passed in 2006 requiring all nonprofits to file tax forms the following year. Prior to the Pension Protection Act of 2006, only organizations with revenues of $25,000 or more had to file. That was then. This is now.
Small nonprofit sports organizations need to file returns or face the loss of their tax-exempt status. The law authorizes the IRS to revoke the tax exempt status of organizations that have failed to file for three consecutive years. As a result, according to a New York Times article, an estimated one-fifth to one-quarter of some 1.6 million charities, trade associations and membership groups will lose their tax exempt status on May 15.
The article goes on to say that the IRS likely will give nonprofits a period of time beyond the May 15 deadline to bring themselves into compliance with the law. It might be time to call your friendly neighborhood accountant.