The Hook recently ran an article listing over 150 non-profits in Charlottesville and Albemarle County that have lost their tax exempt status for failure to file a Form 990 or 990-EZ. Nearly every tax exempt organization is required to file a Form 990 on an annual basis. Failure to file may result in an automatic loss of exempt status.
In addition to losing tax exempt status, the failure to file a Form 990 can result in a penalty of $20 for each day the 990 is not filed, up to $10,000.00.
An organization or individual that solicits donations and falsely represents that donations are tax deductible faces the prospect of penalty under Virginia law and violates federal law.
It appears that many of the organizations in Charlottesville and Albemarle County that are losing their tax exempt status are no longer operating. However, several of them are and the article is a reminder of the importance of consulting with an attorney to ensure that all annual filings are made to maintain a corporation or entity.