IR 2010-87 (http://www.irs.gov/newsroom/article/0,,id=225959,00.html)

IRS has announced that under a one-time relief program small tax-exempt organizations that failed to file returns for 2007, 2008 and 2009 can avoid losing their tax-exempt status by filing a return by Oct. 15, 2010. Two types of relief are available: (1) a filing extension for the smallest organizations (eligible to file Form 990-N); and (2) a voluntary compliance program for small organizations (eligible to file Form 990-EZ).

Filing requirement for tax-exempts. Under Code Sec. 6033(a), most tax-exempt organizations, other than churches, must file with IRS an annual Form 990, Form 990-EZ (Short Form Return or Organization Exempt From Income Tax), or Form 990-PF (Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation), or submit a Form 990-N (Electronic Notification (e-Postcard)). For the 2009 tax year (returns filed in 2010), exempt organizations with gross receipts over $500,000 or total assets over $1.25 million are required to file Form 990 (rather than Form 990-EZ). Under the discretionary exemption in Code Sec. 6033(a)(3)(B), IRS provides that exempt organizations whose annual gross receipts aren't normally in excess of a specified amount file the simplified Form 990-N. Starting with the 2010 tax year, IRS will increase from $25,000 to $50,000 the filing threshold for organizations required to file Form 990-N.

Three year filing rule. Under the 2006 Pension Protection Act (PPA), a non-church exempt organization's failure to file Form 990 for three consecutive years will result in the revocation of the organization's exempt organization status under Code Sec. 501(a) on and after the date IRS has set for filing the third annual return or notice. (Code Sec. 6033(j)(1)) The PPA filing requirement has been in effect since the beginning of 2007, which makes 2009 the third consecutive year under the new law. Thus, absent a relief measure, any exempt organization that fails to file for 2007, 2008 and 2009 automatically loses its federal tax-exempt status.

Form 990-series information returns are due on the 15th day of the fifth month after an organization's fiscal year ends. For organizations using the calendar year as their fiscal year, May 15 is the deadline. Since May 15 fell on a Saturday, the deadline this year was Monday, May 17.

If an organization loses its exemption, it ordinarily must reapply with IRS to regain its tax-exempt status, and any income received between the revocation date and renewed exemption may be taxable.

One-time relief. In IR 2010-87, IRS announced that two types of relief are available for small tax-exempt organizations that would lose their exempt status under the three-year filing rule: (1) a filing extension for the smallest organizations required to file Form 990-N; and (2) a voluntary compliance program for small tax-exempt organizations eligible to file Form 990-EZ. IRS has provided details about the relief program on its website, along with Frequently Asked Questions (FAQs). The one-time filing relief program FAQs can be viewed on the IRS website at http://www.irs.gov/charities/article/0,,id=225954,00.html.

IRS advised that tax-exempt organizations eligible to file Form 990-N need only go to its website, supply the eight information items called for on the form, and electronically file it by October 15. That will bring them back into compliance.

Under the voluntary compliance program, IRS advises that tax-exempt organizations eligible to file Form 990-EZ must file their delinquent annual information returns by October 15 and pay a compliance fee. IRS says that the compliance fee is in lieu of taxes, penalties, and interest that otherwise would be incurred because of the failure to file. If the organization's gross receipts (as reported on the 2009 information return) are $100,000 or less, the compliance fee is $100; if they are $100,001 to $200,000, the fee is $200; and if they are $200,001 to $499,999, the fee is $500. The payment of the compliance fee doesn't affect the organization's liability for any taxes that would be imposed even if they had filed their returns, including but not limited to unrelated business income tax and employment taxes.

IRS cautions that this relief isn't available to larger organizations required to file Form 990 or to private foundations that file Form 990-PF.

List of noncompliant organizations. To further alert tax-exempt organization to the problem, IRS has also posted on its website the names and last-known addresses of at-risk organizations with return due dates between May 17 and Oct. 15, 2010 for which IRS has no record that the required returns have been filed for the past three years (see http://www.irs.gov/charities/article/0,,id=225889,00.html). IRS will keep this list on its website until Oct. 15, 2010. Organizations that have not filed their required returns by that date will have their tax-exempt status revoked. IRS will publish a list of these revoked organizations in early 2011.

IRS warns, however, that the list may be incomplete, and that certain organizations may be at risk even though their names don't appear. In addition, the list may include organizations that were required to file Form 990 or Form 990-PF and so aren't eligible for the relief program, as well as organizations whose filing dates have not yet occurred.

IRS advises that donors who contribute to at-risk organizations are protected until this final revocation list is published.

RIA Research References: For tax-exempt organization's annual return Form 990, see FTC 2d/FIN ¶ S-2801; United States Tax Reporter ¶ 60,334; TaxDesk ¶ 688,001.

VA Simplifies Access to Health Care and Benefits for Veterans with PTSD

WASHINGTON (July 12, 2010) - Secretary of Veterans Affairs Eric K. Shinseki announced a critical step forward in providing an easier process for Veterans seeking health care and disability compensation for Post-Traumatic Stress Disorder (PTSD), with the publication of a final regulation in the Federal Register.

"This nation has a solemn obligation to the men and women who have honorably served this country and suffer from the often devastating emotional wounds of war," said Secretary of Veterans Affairs Eric K. Shinseki.  "This final regulation goes a long way to ensure that Veterans receive the benefits and services they need."

By publishing a final regulation in the Federal Register to simplify the process for a Veteran to claim service connection for PTSD, VA reduces the evidence needed if the trauma claimed by a Veteran is related to fear of hostile military or terrorist activity and is consistent with the places, types, and circumstances of the Veteran's service.

This science-based regulation relies on evidence that concluded that a Veteran's deployment to a war zone is linked to an increased risk of PTSD.

Under the new rule, VA would not require corroboration of a stressor related to fear of hostile military or terrorist activity if a VA doctor confirms that the stressful experience recalled by a Veteran adequately supports a diagnosis of PTSD and the Veteran's symptoms are related to the claimed stressor.

Previously, claims adjudicators were required to corroborate that a non-combat Veteran actually experienced a stressor related to hostile military activity.  This final rule simplifies the development that is required for these cases.

VA expects this rulemaking to decrease the time it takes VA to decide access to care and claims falling under the revised criteria.  More than 400,000 Veterans currently receiving compensation benefits are service connected for PTSD. Combined with VA's shorter claims form, VA's new streamlined, science-based regulation allows for faster and more accurate decisions that also expedite access to medical care and other benefits for Veterans.

PTSD is a medically recognized anxiety disorder that can develop from seeing or experiencing an event that involves actual or threatened death or serious injury to which a person responds with intense fear, helplessness or horror, and is not uncommon among war Veterans. 

Disability compensation is a tax-free benefit paid to a Veteran for disabilities that are a result of -- or made worse by -- injuries or diseases associated with active service. 

For additional information, go to  www.va.gov or call VA's toll free benefits number at 1-800-827-1000.

The Army owes about 120,000 Veterans extra pay and VA is reaching out to find them. The Army is seeking soldiers, Veterans, and survivors of soldiers whose service was involuntarily extended under Stop Loss Authority between September 11, 2001 and September 30, 2008. The 2009 War Supplemental Appropriations Act stipulates they are eligible for special pay. Those eligible will receive $500 for each month or partial month served in stop loss status.

To receive this benefit, those who served under Stop Loss must submit a claim by October 21, 2010. Stop Loss Veterans can submit their online at https://www.stoplosspay.army.mil.

The Army encourages all candidates to visit its Web site to check eligibility and submit claims. The Army's Web site will also answer frequently asked questions about the claim process and has a link to the program's official Facebook page. Applicants who have questions not covered by the Web site can e-mail RetroStopLossPay@conus.army.mil or call 877-736-5554.

Veterans can also link to the eligibility and claims information on the VA Vet Center home page at http://www.vetcenter.va.gov/index.asp - click on RSLP at the bottom of the left side column.

The Department Convention Sweepstakes drawing was held on June 27, 2010 at the Holiday Inn Hotel in Beaumont.

Congratulations’ to the following winners:

Grand Prize - $10,000.00 Harry Ulsrud of Rye - Post 345
Second Prize - $5000.00 Leo Guidry, Jr. of Orange - Post 616
Third Prize - $2500.00 Jim Mills of Memphis - Post 175
Fourth Prize - $1500.00 Billy Davenport of Alpine - Post 79
Fifth Prize - $500.00 Thomas Royal of Caldwell - Post 345
Sixth Prize - $500.00 Lehman Dawson Jr. of Sherman - Post 29

Winners are posted in the next monthly issue of the Legion Times immediately after the drawing and can be found at http://www.txlegion.org/legion_times

Simpler Forms and New Program Reduce Paperwork and Speed Process

WASHINGTON (June 15, 2010) – As part of Secretary of Veterans Affairs Eric K. Shinseki’s effort to break the back of the backlog, the Department of Veterans Affairs (VA) is reducing the paperwork and expediting the process for Veterans seeking compensation for disabilities related to their military service.

“These reductions in paperwork, along with other improvements to simplify and speed the claims process, symbolize changes underway to make VA more responsive to Veterans and their families,” said Secretary Shinseki.

VA has shortened application forms to reduce paperwork for Veterans. The new forms, which are being made available on VA’s Web site at www.va.gov/vaforms, include:

• A shortened VA Form 21-526 for Veterans applying for the first-time to VA for disability compensation or pension benefits.  This form has been cut in half – from 23 to 10 pages.  It is immediately available to Veterans via Web download, and will be available through VA’s online claim-filing process later this summer at
http://vabenefits.vba.va.gov/vonapp/main.asp

• VA Form 21-526b for Veterans seeking increased benefits for conditions already determined by VA to be service-connected.  This new form more clearly describes the information needed to support claims for increased benefits.

In order to make the claims process faster, VA has also introduced two new forms for Veterans participating in the Department’s new fully developed claim (FDC) program, which is one of the fastest means to receive a claims decision.

Gathering the information and evidence needed to support a Veteran’s disability claim often takes the largest portion of the processing time.  If VA receives all of the available evidence when the claim is submitted, the remaining steps in the claims-decision process can be expedited without compromising quality.

To participate in the FDC program, Veterans should complete and submit an FDC Certification and VA Form 21-526EZ, “Fully Developed Claim (Compensation),” for a compensation claim, or a VA Form 21-527EZ, “Fully Developed Claim (Pension),” for a pension claim.

The forms were designed specifically for the FDC program.  These six-page application forms include notification to applicants of all information and evidence necessary to “fully develop” and substantiate their claims.  With this notification, Veterans and their representatives can “fully develop” their claims before submission to VA for processing.

Along with the application and certification, Veterans must also submit all relevant and pertinent evidence to “fully develop” their claims.  A claim submitted as “fully developed” may still require some additional evidence to be obtained by VA, to include certain federal records and a VA medical examination.

VA provides compensation, pension, education, loan guaranty, vocational rehabilitation, employment, and insurance benefits to Veterans and their families through 57 VA regional offices.

Disability compensation is a tax-free benefit paid to a Veteran for disabilities that are a result of -- or made worse by -- injuries or diseases that happened while on active duty, active duty for training or inactive duty training.  Pension is a benefit paid to wartime Veterans with limited income, and who are permanently and totally disabled or age 65 or older.

For additional information, go to www.va.gov or call VA’s toll free benefits number at 1-800-827-1000.