The Internal Revenue Service (“IRS”) has extended the filing date to February 1, 2013 for an eligible exempt organization affected by Hurricane Sandy that previously had its exempt status revoked and is now applying for the reinstatement of its status. As we have said in this blog entry, the Pension Protection Act of 2006 added Section 6033(j) to the Code, which provides for automatic revocation of the tax exempt status of any organization that fails to file the required information return (i.e., Form 990, Form 990-EZ or Form 990-N) for three consecutive years beginning in 2007. Any organization subject to automatic revocation must reapply in order to have its tax-exempt status reinstated.
Before the addition of 6033(i) to the Code, which was also added to the Code by the Pension Protection Act of 2006, small organizations had never been required to file an annual tax return or notice. Since 2007, however, small organizations have been required to file an annual Form 990-N e-Postcard pursuant to the Section 6033(i). The IRS recognizes that many small organizations are run by volunteers, who may have difficulty meeting U.S. federal tax obligations. Accordingly, the IRS has issued multiple reminders about the filing requirements and has offered transitional relief for certain small organizations that have already been subject to automatic revocation.
Notice 2011-43 provides transitional relief for certain small organizations that were not required to file before 2007, were eligible in each of the taxable years 2007, 2008, and 2009 to file a Form 990-N e-Postcard, and lost their exempt status because they did not file the required information returns. Under the transitional relief offered by the IRS, organizations that meet these requirements and apply for reinstatement by December 31, 2012 will be treated as having established reasonable cause for failure to file and will have their tax exempt status reinstated retroactive to the date it was actually revoked. If an organization is eligible for transitional relief and its principal place of business is located in the covered disaster area or records necessary to meet the deadline are located in the covered disaster area, then any application filed by February 1, 2013 will be treated as if it had been timely filed on December 31, 2012. Organizations that are outside the covered disaster area must apply by December 31, 2012.
Organizations that wish to take advantage of the transitional relief must apply for reinstatement using a Form 1023 or Form 1024, Application for Recognition of Exemption. Organizations that are in the covered area and are using the extended deadline should write “Notice 2011-43” and “Sandy Relief” on the top of the form and on the envelope.