Woodridge Non-Profits Lose Tax Exempt Status

Exploring a curious thought tonight, it was quite a shock to come across a July 2011 Patch headline that reads: "Woodridge Non-Profits Lose Their Tax Exempt Status".

As a Paralegal in The Hymes Law Office, here in Seven Bridges the contents of the article made me ponder that though the years have past, Non-Profits (NFP’s) continue to lose their tax exempt status.

I think it is heartbreaking when any business, especially local businesses, face serious conflict.

Based on the requests from local NFP's that come across my desk, if one does not have a legal &/or accounting background [preferably with knowledge of tax law], it is difficult to fully comprehend what is involved in the proper formation of an NFP; and, the simultaneous maintaining of the NFP in 'Good Standing" with the State of IL and the IRS.

Why even bother to form an NFP? NFP's are most often formed by well-meaning individuals, who recognize an opportunity to help others, and with the best of intentions - they decide to establish an NFP for its many benefits to their business, and their donors. Once the NFP receives its registered name and its tax number, these well-meaning individuals or groups believe they are 'good to go'. They proceed to eagerly welcome donations to fund the NFP with the sincere expectations of helping others, and to grow their cause. After all, there are so many short-cut instructions online that tell us exactly how to do just this! Look out though because now your NFP may be slipping on dangerous black ice, since short cuts often prove a poor choice! I would caution you to seek an attorney who Practices corporation law - and here is why.

The formation of an NFP is a very involved process, thanks to our State and Federal Agencies. The proper steps to acquiring and maintaining an NFP are numerous, time sensitive, and must be done precisely. Setting up an NFP is not rocket science to some, but it may well be the equivalent. Remember - these are government agencies that set the guidelines and requirements - because they can; and, the NFP must meet and maintain these seemingly endless requirements or . . . . you may lose your tax exempt status.

When a local NFP looses its tax exempt status, most likely the NFP was unaware of the ongoing process of remaining in 'Good Standing'; or they did not realize what to do, once they received notice of the loss of their tax-exempt status.

Nonetheless, if an NFP wishes to continue their great cause - know that your hard work and giving Spirit is not lost. We invite you to give us a call (630) 963-9900 to discuss whether your NFP meets the criteria for reactivation, or other options.

Blessings to all local NFP's who have reached out to help our Community. We appreciate the Gift of You.