A New England charity aimed at helping to keep the local dairy economy going is having to clean up a little spilled milk. Improper business formation and planning has forced the group to reorganize as s 501C3 Corporation and pay more than a third of its earnings in taxes. However, because it was a self-imposed audit that recognized the mistakes, the IRS is not seeking any punitive tax collection actions.
Massachusetts residents may be interested in a case involving the revocation of an organization's nonprofit status. The Marine Museum, which was established back in 1968, has lost its nonprofit status with the IRS for not complying with federal regulations pertaining to filing. The museum initially exhibited items that had been donated to it, including models from the original U.S.S. Titanic 1953 film and replicas of the Fall River Line steamers.
It's hard to overstate the importance of filing a timely and accurate tax return with the IRS, but many low-income individuals and families are often hard-pressed to afford good tax advice. Yet according to the community organization Chelsea Neighborhood Developers (CND), on average, IRS tax refunds represent 9 percent of low-income households' total income for the year.
The Internal Revenue Service do not take infractions of their rules lightly. Even unintentional or minor violations are punishable with heavy fines and a potential jail sentence. Under IRC Section 6050I, any person or business that receives $10,000 or more in a single transaction is required to file Form 8300 within 15 days of receiving the funds. All bank deposits made in the US are monitored, and banks are required to report cash deposits in excess of $10,000 to the IRS. The owner of a recycling business in Somerville has been charged by a federal grand jury in Massachusetts with structuring payments in order to avoid detection by regulators.