The IRS continues to implement the “three years and you’re out” rule for Form 990 non-filers added by the Pension Protection Act of 2006 (the “PPA”). That legislation amended Section 6033 of the Internal Revenue Code to provide that exempt organizations required to file a Form 990-series return (i.e., a Form 990, Form 990-EZ or Form 990-N) that do not file the return for three consecutive years will have their tax-exempt status automatically revoked going forward. Organizations subject to automatic revocation are required to file exemption applications with the IRS to regain exempt status, even if they were not originally required to file an application for recognition of exempt status. Further, exempt status will not be restored retroactively unless the IRS finds there was reasonable cause for the failure to file.
automatic revocation
New Streamlined IRS Online Search Tool Makes it Easier to Find Information about Tax-Exempt Organizations, Including Whether an Organization Has Ever Been Subject to Automatic Revocation of its Tax-Exempt Status
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The IRS recently unveiled its new streamlined online search tool, Exempt Organizations Select Check (“EO Select Check”), which provides one place where taxpayers can go to find out: (1) whether an organization is eligible to receive tax-deductible contributions; (2) whether the organization has ever been subject to automatic revocation of its tax-exempt status for failing to file a required Form 990, Form 990-EZ or Form 990-N (aka, the “e-Postcard”) for three consecutive years; and (3) whether a small organization has filed the e-Postcard. Previously, taxpayers had to utilize three separate online search sites to find this information (the electronic version of Publication 78 (i.e., the list of exempt organizations eligible to receive tax-deductible contributions), the online Auto-Revocation List and the e-Postcard database).…
275,000 Nonprofits Lose Tax-Exempt Status
By Christopher T. Bird on
The IRS announced June 8, 2011 that approximately 275,000 organizations lost their tax-exempt status because they did not file annual returns for three consecutive years. The IRS has published on its website separate lists of affected organizations for each state.
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