Tax
Issues for Non-Profits
Not for profit organizations have federal and state tax concerns.The
IRS has traditionally acted as the "gate-keeper." If the organization
was exempt from tax by the IRS the states typically followed the
federal decision. Now, state governments, anxious to collect income and
sales taxes, and municipalities trying to squeeze real estate taxes
from non-profits, are ignoring Federal Nonprofit status.
In a long-standing
battle,the Illinois Supreme Court on March 18, 2010y ruled that a
Catholic hospital was not "charitable enough," so it took away the
hospital's tax-exempt status. The purpose was to force the hospital to
pay millions of dollars in real estate taxes. The Court, ignoring the
purpose of the hospital and the high number of medicare and medicaid
patients, as well as uninsured patients who simply cannot pay, both of
which cause significant loses, focused on the hospital providing 1% of
its care for free. The Provena
Medical case is a good example
of the over-reaching of State and Local Governments,