Form 990 Relief for Small Nonprofits a Possibility?

Posted in Nonprofit Organizations on May 19, 2010

According to the Pension Protection Act of 2006 and previous, unequivocal announcements from the IRS, nonprofits neglecting to file Form 990 (whichever of the three versions it was supposed to file) for three consecutive years automatically lost their tax-exempt status this week (at least those who operated on a calendar year basis for tax purposes), and the only way to cure the problem would be to file another Form 1023, pay the required filing fee, and start all over.  The IRS’s FAQ page states very clearly that this is statutory law.  No waivers, no appeals, no exceptions, no mea culpas. 

But now, according to Doug Shulman, IRS Commissioner, the IRS is considering granting some measure of grace to small organizations, presumably those who were required to file Form 990-N (the e-postcard).  This would seemingly require an act of Congress to amend the 2006 law that imposed this strict requirement, but we will have to wait and see what transpires in the coming months.  In any event, the IRS does not anticipate starting to send notices (i.e., the bad news) to organizations that have lost their tax-exempt status until the end of the year.

Franchisors Continue to Offer Concessions to Attract Prospects

Posted in Franchising on May 19, 2010

Many franchisors continue to have a tough time selling franchises and are offering discounts, financing assistance, no-royalty periods, and other creative concessions to attract prospective franchisees.  One recent example is Fantastic Sams, which just announced a significant reduction in its initial franchise fee.  Read more here:  The Salt Lake Tribune (Utah).