I was researching education news for my website www.roccobasile.net, and found a story today in the New York Times. About 400,000 nonprofits will lose their tax breaks as of  midnight on May 15 -- that is an estimated one-fifth to one-quarter of some 1.6 million charities, trade associations and membership groups.  Small organizations are the most likely to be hit. Experts say it is likely that many of them are inactive and were unaware of the requirement. This is because of a provision  aimed at pension reform that is buried in a 2006 federal bill

Legislation called the Pension Protection Act of 2006 required all nonprofits to file tax forms the following year in 2007, when prior to that, only those with revenues of $25,000 or more  had to file.  This new law also directed the IRS to revoke the tax exemptions of groups that failed to file for three consecutive years. That is now.

Organizations will lose their exemptions on May 16, the I.R.S. but they will probably not send out notices until January to give nonprofits a chance to become compliant.

-- Rocco Basile