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"But a Constitution of Government once changed from Freedom, can never be restored. Liberty, once lost, is lost forever." - John Adams

Sunday, May 16, 2010

Thousands of Nonprofits may be shut down by new tax law

More than 200,000 small nonprofits across the nation are days away from losing their tax-exempt status because they haven't filed a new form with the Internal Revenue Service.

"Many of these groups already operate on razor-thin budgets and some worry an unexpected tax bill could force organizations to close.

"The nonprofits in your backyards, some of them are going to be gone," said Suzanne Coffman, a spokeswoman for GuideStar, which tracks data on nonprofits.

It's most likely the nonprofits aren't aware of the Monday deadline that only applies to groups that report $25,000 or less in income, excluding churches. Those organizations may not find out until Jan. 1, 2011, when they're notified they have to pay taxes on donations they thought were exempt. And it could be months before their nonprofit status is restored."

Am I the only one who sees this for what it is? The government is forcing all private aid societies to lose their nonprofit status, either to force them onto the tax rolls or to shut them down. Either way the government wins and liberty loses. By shutting them down the government forces higher taxation of all individuals and assumes some of the role of the nonprofits. This, of course, leads to less individual wealth across the board, more inefficient bureaucracy and less service to the needy at a higher cost to all. The other option is that nonprofits who are already on a very thin budget are forced to pay taxes and offer less service to those in need.
Either way, the only winner is government, and the big loser is those who need the services provided by the nonprofits.

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