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Comptroller program aims to aid at-risk nonprofits

Maryland Comptroller Peter Franchot has started a program to notify nonprofit organizations of the IRS’s annual filing requirement so the nonprofits can keep their tax-exempt status.

Peter Franchot

Comptroller Peter Franchot (File photo)

Since the requirement was applied to small nonprofits, an estimated 6,000 to 8,000 organizations in Maryland have lost their status, Franchot said at an announcement of the program Friday in Baltimore.

“Getting information to the small organizations has been a challenge,” he said. “For many of them, the main problem is just not being aware.”

Franchot’s staff recently began mailing notification letters to 6,800 nonprofit organizations in the state, telling them they could lose their exempt status and urging them to file with the IRS so they do not.

The organizations are at risk because they have not filed annual reports with the government for at least a year. The IRS provided a list of 6,700 such organizations to the comptroller’s office.

Before 2006, small nonprofits were not required to file annually, but under current law, they can lose their tax-exempt status if they fail to file for three consecutive years.

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