Could Your Nonprofit Be Out of Compliance Without Knowing It?

It happens more often than you might think.

Recently, a small nonprofit contacted Spokes with a question about its filings. After a quick compliance review, we discovered the organization had unintentionally lost its tax-exempt status. Like many nonprofits, they believed they had filed everything correctly and had no idea there was a problem.

Unfortunately, over the years we’ve seen several organizations find themselves in similar situations.

California nonprofits have numerous filing requirements each year. For many organizations, some of those required filings are surprisingly simple—even a one-page form or IRS e-Postcard. But missing just one required federal or state filing can have significant consequences.

While it’s often possible to restore an organization’s good standing, the process can be lengthy, involve additional paperwork and fees, and divert valuable staff and board time. A few minutes spent reviewing your compliance status now can help prevent much bigger headaches down the road.

CalNonprofits recently shared two excellent compliance resources:

• Nonprofit Compliance Checklist – A practical guide to annual federal and California filing requirements, organized in an easy-to-follow checklist.
• Tax Compliance Webinar Presentation – Slides from a recent webinar covering common filing requirements, deadlines, and compliance tips.

We encourage every nonprofit to take a few minutes to review these resources and make compliance part of its annual organizational checkup!