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October 17, 2007, 05:38 PM ET
Too Many Small Groups Must File Informational Tax Return, IRS Official Says
An Internal Revenue Service official is urging the tax agency to increase the threshold for nonprofit groups that file the Form 990 informational tax return.
Nina E. Olson — who serves as the national taxpayer advocate at the IRS — has told the tax agency that only charities with revenue of $50,000 or more should be required to file the form. Today, organizations with at least $25,000 in revenue are required to do so.
Ms. Olson also recommends that the threshold be indexed to inflation.
Ms. Olson, who operates independently of other IRS offices and reports to Congress, made the recommendation as part of her comments about proposed changes to the Form 990, says changing the budget ceiling would eliminate administrative burdens faced by small charities that are required to file the form.
She says the threshold has been static for 25 years. Meanwhile, the Consumer Price Index, which measures inflation, has increased by more than 109 percent during the same period.
“There is little risk that relieving more small exempt organizations from the filing requirements will increase noncompliance or abuse,” Ms. Olson wrote in explaining the recommendation.
What do you think? Should the $25,000 requirement stay in place or should it be increased? Click on the comments link below this post to share your thoughts.
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