Around Half a Million U.S. Charities Losing Tax Exempt Status

Today has gotta be a very, very bad Monday for lotsa folks that work for non-profits around the country. 

That's because last Friday, May 15, 2010, around a half-million charities in this country lost their non-profit status.  Well, maybe it's a bad Monday if they're aware of what has just happened to them.

According to the story in last month's New York Times, "One-Fourth of Nonprofits Are to Lose Tax Breaks," by Stephanie Strom, many of these charities may not be aware of their lost tax exemption.  Most of these do-gooders operated at $25K in revenue or less, and may or may not have been filing tax forms (because they may not have been required to do so in past years). 

USA Today points to organizations like kid's baseball teams and soup kitchens being hit by this. 

Fortunately, there's some help here:  The National Center for Charitable Statistics has posted an online list, state by state, of nonprofits that may be hit by this deadline.  And, they've also got the info on what these organizations need to do in order to prevent their donations from being taxed. 

Taxing a soup kitchen?  Really????

The Massive Confusion of US Estate Taxes - Attorney Seminar to "Enlighten and Depress"

This morning's inbox included the following seminar invitation from the State Bar of Texas:

A Look at the Current State of the Estate Tax: Massive Confusion

Approved for State Bar College Credit and Texas Board of Legal Specialization Credit in Estate Planning & Probate and Tax Law.
Live Via Webcast
Thursday, February 11th
10:00 a.m. - 11:00 a.m.
1 hour MCLE credit


With the failure of Congress to do something with respect to the one-year suspension of the federal estate tax and generation skipping transfer tax and the one-year return of carryover basis, followed by a return to 2000 law, we are in a situation of having no reasonable or rational way to advise our clients. Two experienced lawyers (who remember the original carryover basis and generation skipping transfer tax in the Tax Reform Act of 1976, both of which were repealed) discuss the alternatives in how they and others are dealing with this uncertainty and highlighting some issues that are not immediately apparent and other problems if Congress does nothing before 1/1/2011. A fun filled hour guaranteed to enlighten and depress you simultaneously.

Now, mind you - this is an invitation to legal practioners in the field of estate planning to come and listen to experts in this area discuss "a situation of having no reasonable or rational way to advise our clients."

What's going on here?  Congress didn't act, even to patch things up by passing a bill that said "everything stays as is until we do something else," so some tax laws died - their effective dates passed on December 31st - and now, we're apparently in a huge, fat mess.