IRS Revokes Tax Exempt Status For Over 33,000 California Charities

10:43 am Uncategorized

IRS Logo1 150x150 IRS Revokes Tax Exempt Status For Over 33,000 California CharitiesThe IRS has announced that it has revoked the tax-exempt status of more than 275,000 charities nationwide – including approximately 33,700 in California – for failure to file annual reports with the IRS for three consecutive years.

Since 2007, charities have been required to file an annual information return or notice with the IRS.  Donors who made past contributions to any charity on the revocation list will not need to take any action to file an amended return; however, future contributions made to any charity on the list will not be considered tax deductible.  The national list broken down by state is available here.

Charitable organizations on the list can apply for reinstatement of their tax-exempt status.  Smaller organizations – those with annual gross receipts of $50,000 or less – are eligible to regain their tax-exempt status by paying a reduced application fee of $100.  Instructions for charities needing to apply for reinstatement can be found here.

Do you have a favorite organization that you would like to leave money to and still enjoy some tax advantages for you and your heirs?  Then you should consider setting up a charitable trust.

The benefits of a charitable trust:

  • You can take an income tax deduction for the value of your charitable gift over the next five years.
  • Upon your death, the trust property goes to the charity – since it is no longer a part of your estate, it is not subject to estate taxes.
  • Appreciated property can be turned into cash without paying capital gains tax on the profit.
  • You can receive income from the trust during your lifetime, via either a fixed annuity or as a percentage of the trust assets.

To learn more about setting up a California charitable trust, contact our Newport Beach estate planning law firm.

Contact us today for individualized planning strategies to meet your unique needs.

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