Is Your Tax Exempt Organization in Danger of Losing Status?
After Three Years of No Filing, Tax Exempt Status is Revoked
Tax exempt organizations have annual filing requirements. If the organization fails to file for three years in a row, then tax-exempt status is revoked. This is not an issue for organizations that have permanently closed and letting the tax-exempt status be naturally revoked is one of the "natural death" processes of dissolving a tax-exempt organization.
However, this is a BIG issue for an organization that wishes to keep their tax-exempt status. Income, including donations, will become taxable once the status is revoked. Taxpayers who make donations to these organizations will find that the donation is not tax deductible.
The IRS is offering one-time relief for getting back into compliance. The relief is for 990-N and 990-EZ filers only. If your organization is required to file Form 990 or Form 990-PF, then there is no relief except to get the tax filing status current before the due date of the third unfiled year's return. Either way, if your organization misses the deadlines, then the only relief is to reapply for tax exempt status.
Use the links below to see if your organization is on the IRS danger list:
IRS.gov link for INDIANA Exempt Organizations At Risk of Revocation of Status - this is a .pdf link to a document, so you will need Adobe to view it.
IRS.gov link for MICHIGAN Exempt Organizations At Risk of Revocation of Status - this is a .pdf link to a document, so you will need Adobe to view it.
IRS.gov ink for access to ALL STATES Exempt Organizations At Risk of Revocation of Status
Links on this page were last updated on 08-27-10. Check the IRS.gov site directly or call the IRS to be certain of status. If you are not sure of your organization's status, then you should take steps to be certain. Call the IRS or check with your CPA for assistance.
Legal and IRS required notice:
This article is not intended to be specific tax advice. It is intended as a general guideline only. Any specific advice should be sought from your tax professional.
CIRCULAR 230 DISCLOSURE: Pursuant to Treasury Department guidelines, any federal tax information contained in this article, or any attachment, does not constitute a formal tax opinion. Accordingly, any federal tax advice contained in this communication, or any attachment, is not intended or written to be used, and cannot be used, by you or any other recipient for the purpose of avoiding penalties
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Useful Resources
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