A bill sponsored by an Indiana lawmaker would require the Internal Revenue Service to notify nonprofit organizations before revoking their tax-exempt status. U.S. Sen. Dan Coats says the lack of notification creates uncertainties for charities, their donors and the people they serve. Under current federal law, charities and other nonprofits automatically lose their tax-exempt status if they do not file annual information returns for three consecutive years. The returns must be filed, even if the charity receives minimal money. According to Coats, 11,600 charities and nonprofits in Indiana have lost their tax-exempt status since 2010 because of this provision. It was originally enacted to clear defunct nonprofit organizations from the government’s tax rolls. Coats adds many community and faith-based organizations have stepped in to fill voids left by government spending reductions. If they lose their nonprofit status they have to file for tax-exempt status again and run the risk of losing donors while waiting for approval.
A sophisticated telephone scam from individuals claiming to be from the Internal Revenue Service has cost taxpayers more than $1 million collectively, according to federal government officials. The Treasury Inspector General for Taxpayer Administration (TIGTA) has received reports of more than 20,000 contacts from nearly every state in the country. Callers claiming to be from the IRS tell intended victims they owe taxes and must use a prepaid debit card or wire transfer to make a payment. They threaten those who refuse to pay with arrest, deportation or loss of a business or driver’s license. George says the threats are a sign that the caller is not an IRS representative. He adds IRS contacts people by mail about unpaid taxes and will not ask for payment via prepaid debit card or wire transfer. IRS officials also will not ask for a credit card number over the telephone. Continue reading
Anyone who prepares or helps prepare all or substantially all of a federal tax return, claim for refund or other federal forms for compensation must have a valid PTIN. All enrolled agents also must have a PTIN. Tax professionals can obtain or renew their PTINs at www.irs.gov/ptin.