When the IRS instituted annual reporting requirements for non-profit organizations, you might have thought they were bringing the famous Oscar Wilde quote ("No good deed goes unpunished") to fruition. While the need to track the progress of 501(c) organizations may cause some headaches, it can be a timely opportunity to effectively review the goals of the mission and ensure that good governance practices are in place. Here’s everything non-profit managers need to know to prepare for tax season.
If you're an officer or on the board of a nonprofit organization, you may wonder about the tax requirements that apply to your group.
Generally, an organization will not owe taxes if two things are true:
- It has registered as an exempt nonprofit organization with the IRS, and
- It has no business income from activities unrelated to its exempt purpose.