For exempt organizations, the IRS requires that you file a tax return each year that reports your total revenue, total expenses, and activities. You submit these annual tax returns based on your gross receipts:
Keep Your Exempt Status
The easiest way to maintain your organization’s tax-exempt status is to file your mandatory 990 form each and every year. Even if you miss the deadline, which may result in IRS penalties, you should still file the return as soon as possible.
Having tax-exempt status allows your donors to write off contributions from their tax return, and it also keeps the federal government from imposing taxes on the income your organization brings in – so it’s important to maintain your status.
Losing Tax Exemption
Failing to file your 990 returns for three consecutive years is the quickest way to lose your exemption status automatically. You can use the EO Select Check to see if the IRS automatically revoked your organization – it’ll list the exact date the revocation became effective.
There are also other ways your organization can lose its exemption status such as participating in political or lobbying activities, but failing to file three years straight is an automatic loss – no questions asked. Conversely, there are particular types of organizations that are naturally exempt – they aren’t required to file a 990 form.
Reclaim Your Exemption Status
If you lose your tax-exempt status, you’ll need to file the correct application for exemption based on your gross receipts and pay the processing fee. You may even be eligible to request reinstatement back to the revocation date.
After you’ve obtained your exemption status again, the IRS may ask you to file 990 forms for the years you’ve missed. With ExpressTaxExempt.com, you have our easy-to-use, cloud-based service to e-file the 990 series for the available tax years within the IRS e-filing system.
You can also keep your tax-exempt status up to date by e-filing with ExpressTaxExempt.com every year. Contact our helpful U.S. – based support team for any questions about the e-filing experience. We’re available at 704.839.2321 – business hours are Monday through Friday from 9 a.m. to 6 p.m. EST, or you can email us 24/7 with support@ExpressTaxExempt.com.