The Internal Revenue Service (IRS) continues to update its Automatic Revocation List, a comprehensive list of all nonprofit organizations that have lost their tax-exempt status due to failure to file required Forms 990 for three consecutive years. This requirement was part of the Pension Protection Act of 2006 which made it mandatory for all tax-exempt organizations (except church and church-related organizations) to file annual returns and imposed an automatic loss of tax-exempt status for failure to file for three consecutive years.
The Automatic Revocation List was first published in early June 2011 and includes over 10,000 nonprofit organizations based in Ohio. The complete Automatic Revocation List can be found here.
Organizations that have lost their tax-exempt status and wish to have that status reinstated must file an application for exemption and pay the appropriate user fee even if it was not required to apply for exempt status initially. In most cases, the effective date of reinstated exemption will be the date that the organization’s exemption application was submitted to the IRS. However, organizations may choose to request that reinstatement be retroactive to the effective date of revocation. The IRS has released the following guidance for such organizations:
- Organizations on the Revocation List may obtain retroactive reinstatement. Notice 2011-44 provides instructions on the additional information these organizations must submit to request retroactive reinstatement. The request for retroactive reinstatement and the application for reinstatement of its tax-exempt status must be filed with the IRS within 15 months of the later of the date of the IRS revocation letter, or the date on which the IRS posts the name of the organization on the Revocation List.
- For certain small organizations (i.e., with annual gross receipts of $50,000 or less for 2010) Notice 2011-43 provides that these organizations may obtain retroactive reinstatement without submitting the additional information requested under Notice 2011-44, so long as they can demonstrate that they were not required to file the Form 990 or 990-EZ for tax years before 2007 and that they were eligible to file the Form 990-N e-postcard for 2007, 2008 and 2009. Additionally, Rev. Proc. 2011-36 provides that a reduced application fee of $100 (instead of the standard $400 or $850 fee) is available for the small organizations eligible under Notice 2011-43. These eligible organizations must postmark their applications to reinstate tax-exempt status no later than December 31, 2012.