Most tax-exempt organizations are required to file either a Form 990, 990-EZ, 990-PF or 990-N (e-Postcard) each year with the IRS to maintain its tax-exempt status. Organizations that fail to file the appropriate form for three (3) consecutive years are considered automatically revoked and lose its tax-exempt status immediately. An automatic revocation is effective on the original filing due date of the third annual return or notice.
Each month, an “Automatic Revocation of Exemption List” will be updated and made available for public records on the IRS website. This list will include the name, EIN, organization type, last known address that the organization has provided, effective date of revocation and the date the organization was added to the list. Organizations that apply for and receive reinstatement to tax-exempt status are also listed on this list with the date of reinstatement provided also.
How To Reinstate Your Exempt Status
Well since we’ve hit the area of reinstatement…let’s talk about it!
Although the law prohibits the IRS from undoing a proper automatic revocation or an appeal process, an organization that has been revoked can be reinstated. There are four ways an organization can be reinstated:
Streamlined Retroactive Reinstatement
This type of reinstatement is for organizations that usually file Form 990-EZ or 990-N (e-Postcard). Tax-exempt status can be reinstated if they have not previously had their tax-exempt status automatically revoked. Also Form 1023, Form 1023-EZ or Form 1024 must be completed and submitted with the appropriate user fee include no later than 15 months after the date listed on the organization’s Revocation Letter or the date the organization appeared on the IRS Revocation List. For more information on where to send this form, click here.
Additionally, if an organization is retroactively reinstated, they will not be charged the failure-to-file penalty if this procedure and necessary files are completed correctly.
Retroactive Reinstatement Process
This process is for organizations that are required to file Form 990 or Form 990-PF. Similar to the streamlined retroactive reinstatement process, in order to be reinstated you must do the following:
- -Complete and submit Form 1023 or Form 1024 with the appropriate user fee not later than 15 months after the date listed on the Revocation Letter or the date in which the organization appeared on the IRS Revocation List.
- -Include a statement with the application that establishes that the organization had reasonable cause for its failure to file for at least one of the three consecutive years in which it failed to file.
- -Include with the application a statement confirming that it has filed required returns for those three years and for any other applicable taxable years.
- -Properly file completed and executed paper annual returns for the three consecutive years that caused the revocation. Organizations should write “Retroactive Reinstatement” on these returns and mail them here.
The failure-to-file penalty will not be charged if this procedure and necessary files are completed correctly.
Retroactive Reinstatement (after 15 months)
Any organization that applies for reinstatement more than 15 months after the later of the date on the organization’s revocation letter or the date the organization appeared on the IRS Revocation List may have their tax-exempt status retroactively reinstated by satisfying all of the requirements described under the “Retroactive Reinstatement (within 15 months)” procedure EXCEPT that the reasonable cause statement that the organization includes with the application must establish reasonable cause for its failure to file a required annual return for all three consecutive years.
No failure-to-file penalty will be applied if the organization is retroactively reinstated under this procedure.
Postmark Date Reinstatement
Last but not least, the final way to be reinstated is for organizations that apply for reinstatement effective from the postmark date of their application if they complete and submit Form 1023, Form 1023-EZ or Form 1024 with the appropriate user fee.
When completing the application write on the top of the form “Revenue Procedure 2014-11, Reinstatement Post-Mark Date” and mail the application here.
Filing Form 990 Series Online
Operating your nonprofit organization without tax-exempt status can be extremely challenging and quite difficult. Eliminate the worry and concern of losing your tax status or even regain tax-exempt status by filing your Form 990 series returns with us at ExpressTaxExempt. With affordable pricing and a safe, secure and easy-to-use e-filing system, organizations can quickly and accurately file their forms directly to the IRS. Need help during the filing process? No worries. We’re always here to help! Feel free to contact our support team of e-file experts at 704.839.2321 for any questions or help with the e-filing experience. We’re here to assist you Monday through Friday from 9 a.m. to 6 p.m. EST or feel free to reach us 24/7 via email at support@ExpressTaxExempt.com.