I am the treasurer of a 501(c)(3) community center. We are thinking of closing the Center. What happens to the exempt status? Does it also cease? Can it be held in the hope of reopening the Center, or can it be transferred to another entity?
It is not unusual for a small nonprofit to shut down operations for a period of time to reorganize and gain enough funding to reopen the program. The exempt status will not be lost immediately. Although the IRS could revoke your exemption for failure to conduct a charitable program, it almost never happens. Under the Pension Protection Act, however, you are now required to report your continued existence to the IRS even if you don’t have the $25,000 of gross receipts to require filing a Form 990. If you fail to report for three state years, you will lose your exempt status. (See Ready Reference Page: “Small Nonprofits Must File E-Postcard to Retain Exemption.”)
You could lose your public charity status if you do not meet the public support test because you have had no income for five years. (See Ready Reference Pages: “Calculating Public Support Percentage.”) The one thing you can’t do is transfer the exempt status to another entity.
State Charitable Solicitation Statutes: Everything You Wanted to Know But Were Afraid to Ask
Charities that seek contributions nationally must typically register in 39 states and the District of Columbia before starting to solicit. Furthermore, for-profit fundraisers are also required to register and file their contracts and other documentation with many states. Since many states are increasing their enforcement efforts to ensure that charities and fundraisers are complying with initial and annual registration requirements, it's important that charities and fundraisers abide by these statutes.
Program materials include an extensive review of the statutes and their provisions, plus a copy of the Uniform Registration Statement for multi-state filings. Purchasers will receive an e-mail receipt that includes a link that will take them to the product download. The download is a pdf file. Learn More
Weekly question and answer
Notice of each full edition
and its free stories
Report on 501(c)(3) electioneering
What our readers say about Nonprofit Issues
Once again you've tackled a tricky question and explained it so we all can understand the issue.--M.V.
Thank you for your informative and keen advice on nonprofit matters. I believe it's a unique and concise place to get answers to this often wispy area called nonprofit. --R.T.
Have a question?
Other ways to
Talk to the Editor
Next Conference Call:
Wednesday, November 5, 2014
Participate in this bi-monthly telephone seminar conference call and ask your questions directly to Editor Don Kramer.
Access the entire site
($9.95/24 hours, $17.95/3 months).
Full Day Program
A well-received full-day program that covers the current hottest topics in nonprofit law. Qualifies in Pennsylvania for Continuing Education credits.
Don is available for programs and speaking engagements ranging from a one-hour presentation to a full-day primer on nonprofit law. Contact us if you are interested in having him speak at your program.