HOW TO FILE TAX EXEMPT STATUS IF IT HAS BEEN REVOKED
BY ACCOUNTING TODAY STAFF
The Internal Revenue Service said Wednesday that approximately 275,000 organizations have automatically lost their tax-exempt status under the law because they did not file legally required annual reports for three consecutive years.
The IRS believes the vast majority of the organizations are defunct, but it also announced special steps to help any existing organizations to apply for reinstatement of their tax-exempt status.
Congress passed the Pension Protection Act in 2006, requiring most tax-exempt organizations to file an annual information return or notice with the IRS. For small organizations, the law imposed a filing requirement for the first time in 2007. In addition, the law automatically revokes the tax-exempt status of any organization that does not file required returns or notices for three consecutive years.
The IRS issued guidance Wednesday on how organizations can apply for reinstatement of their tax-exempt status, including retroactive reinstatement. In addition, the IRS announced transition relief for certain small tax-exempt organizations—those with annual gross receipts of $50,000 or less for 2010—that were made subject to the new "postcard" filing under the PPA. The relief allows eligible small organizations to regain their tax-exempt status retroactive to the date of revocation and pay a reduced application fee of $100 rather than the typical $400 or $850 fee. Full details are available in Notice 2011-43, Notice 2011-44 and Revenue Procedure 2011-36, issued Wednesday.
If an organization appears on the list of organizations whose tax-exempt status has been automatically revoked, it is because IRS records indicate the organization had a filing requirement and did not file the required returns or notices for 2007, 2008 and 2009.
The list of organizations whose tax-exempt status has been revoked for failing to meet their filing requirement, which will be available on the IRS Web site at www.IRS.gov, includes each organization’s name, Employer Identification Number and last known address. It is searchable by state. It also includes the effective date of the automatic revocation and the date it was posted to the list. The IRS will update the list monthly to include additional organizations that lose their tax-exempt status.
If your Post is struggling to file, please contact National Headquarters for assistance and guidance.