Nonprofit Tax Help

Nonprofit Taxpayers: What to Do If You Haven’t Filed Tax Returns in Years—A Complete Guide to Accounting, Bookkeeping, Compliance, and Avoiding IRS Scrutiny

By Mike Habib, EA – Los Angeles, CA

Introduction

If you’re a nonprofit leader, board member, or bookkeeper, you know your mission is to serve the public good. But what happens when your organization falls behind on IRS filings? Maybe you didn’t realize you had to file, or perhaps you were overwhelmed by other priorities. Now, you’re worried about penalties, losing tax-exempt status, or even an IRS audit.

You’re not alone. Many nonprofits—especially smaller ones—struggle with tax compliance. The good news? With the right knowledge and support, you can get back on track, protect your organization, and focus on your mission.

As an Enrolled Agent (EA) and founder of Mike Habib, EA, a Los Angeles, CA-based tax firm serving clients nationwide (including Americans abroad), I specialize in helping nonprofits resolve tax problems, represent them before the IRS and state agencies, and set up robust accounting and compliance systems.

This comprehensive FAQ will answer your most pressing questions about nonprofit tax compliance, accounting, bookkeeping, and how to avoid IRS scrutiny—even if you haven’t filed in years.

Nonprofit Tax Service by Mike Habib, EA

Nonprofit organizations play a crucial role in society, offering valuable services and advocacy. However, managing tax compliance can be a significant challenge due to the complex nature of tax laws and regulations. This article explores common tax compliance issues faced by nonprofits and how an Enrolled Agent (EA) can help resolve these problems, with references to relevant Internal Revenue Code (IRC) sections, preparation, planning and compliance requirements.

1. Understanding the Importance of Maintaining Tax-Exempt Status
One of the primary concerns for any nonprofit is maintaining its tax-exempt status under IRC Section 501(c)(3). This status exempts nonprofits from federal income tax on their earnings related to their exempt purpose. However, failure to comply with the regulations can result in the revocation of this status.

Common Compliance Issues:

Failure to file the annual return (Form 990) leading to automatic revocation of tax-exempt status as stipulated under IRC Section 6033(j).
Engaging in excessive unrelated business income (UBI), which is taxable under IRC Section 511.
Participating in political campaigns or substantial amounts of lobbying, which are restricted under IRC Section 501(c)(3).
Resolution through an Enrolled Agent:
An EA can assist nonprofits in navigating these regulations by ensuring timely and accurate filing of Form 990 and advising on activities that may jeopardize their tax-exempt status. They can also help in planning and reporting UBI to avoid potential taxes and penalties.

Get professional help by calling us at 1-877-78-TAXES [1-877-788-2937].

Articles Posted in Nonprofit Tax Help

Nonprofit Taxpayers: What to Do If You Haven’t Filed Tax Returns in Years—A Complete Guide to Accounting, Bookkeeping, Compliance, and Avoiding IRS Scrutiny

Nonprofit 990 Tax Compliance: Navigating Challenges with an Enrolled Agent