Senator Dan Coats (R-Ind.) proposed a bill on May 15 that would require the Internal Revenue Service (IRS) to alert nonprofit organizations before their tax-exempt status gets revoked, according to a release. Currently, charities and other nonprofit organizations lose their tax-exempt status if they fail to file annual information returns for three consecutive years. 11,600 charities and nonprofits in Indiana have lost their tax-exempt status because of this since 2010, and more than 550,000 charities and nonprofits across the nation have lost their tax-exempt status over the past four years, according to an article by Fort Wayne Business Weekly.
“Because the IRS does not adequately notify charities as this deadline approaches, many nonprofits discover the problem only after their names appear on a list of organizations that have already lost their status, after it is too late to act,” Coats said. “Some never realize it at all.”