On June 8, 2011, the Internal Revenue Service released a list of approximately 275,000 organizations that automatically lost their tax-exempt status because the organizations failed to file the legally required annual returns or reports for the past three years. If an organization appears on the list, IRS records indicate that the organization has an annual filing requirement, but that the organization has not filed the required returns or reports for 2007, 2008 and 2009.
The Pension Protection Act of 2006 requires most tax-exempt organizations to file an annual return or report with the IRS. For small tax-exempt organizations, a filing requirement was imposed for the first time in 2007. The law automatically revokes the tax-exempt status of any organization that does not file required returns or reports for three consecutive years. The IRS believes that most of the organizations listed are no longer in operation.
In addition to releasing the list of revoked organizations, the IRS issued guidance on how organizations can apply for reinstatement of their tax-exempt status, including retroactive reinstatement. Existing organizations that seek to have their tax-exempt status reinstated must complete an application and pay an application fee regardless of whether they were originally required to file such an application. Small tax-exempt organizations with annual gross receipts of $50,000 or less may be eligible to pay a reduced application fee.