Automatic Revocation of
Tax-Exempt Status
August 24, 2011
©2011 National Council of Nonprofits | www.councilofnonprofits.org
Presenters
Eve Borenstein
Borenstein and McVeigh Law Office LLC
www.taxexemptlaw.org
Matthew Giuliano
IRS Tax Law Specialist
Exempt Organizations, Guidance
Sharon Light
Senior Technical Advisor
IRS Exempt Organizations, Office of the Director
©2011 National Council of Nonprofits | www.councilofnonprofits.org
Automatic
Revocation
Effective for years beginning after December
31, 2006
 Filing requirement for organizations not
required to file an annual information return § 6033(i)
 Loss of exemption by operation of law for
organizations that fail to file a required return
or notice for three years - § 6033(j)
990-N (e-Postcard)
990-N
Automatic Revocation
 Revocation
under § 6033(j) is by operation
of law
 The
IRS maintains an auto-revocation list
on www.irs.gov
 The
IRS sends notice letters to the last
known address of each revoked
organization
May 18, 2010
“The IRS will be providing additional guidance in
the near future on how it will help these
organizations maintain their important taxexempt status — even if they missed the May 17
deadline. The guidance will offer relief to these
small organizations and provide them with the
opportunity to keep their critical tax-exempt
status intact.
So I urge these organizations to go ahead and
file — even though the May 17 deadline has
passed.
IRS Offers One-Time Special Filing Relief
Program for Small Charities; Oct. 15 Due Date
to Preserve Tax-Exempt Status
WASHINGTON — Small nonprofit
organizations at risk of losing their taxexempt status because they failed to file
required returns for 2007, 2008 and 2009 can
preserve their status by filing returns by Oct.
15, 2010, under a one-time relief program,
the Internal Revenue Service announced
today.
Limited One-Time
Filing Relief Programs
 Extension
of Time to File for Organizations
Eligible to Submit Form 990-N
 Voluntary
Compliance Program (VCP) for
Organizations Eligible to File Form 990-EZ
Notice
Tax period
Notice date
Employer ID number
To contact us
Department of Treasury
Internal Revenue Service
Ogden, UT 84201-0074
CP120A
Month __, ____
Month, Day, Year
99-999999
Phone 1-877-829-5500
Page 1 of 2
NAME
STREET
CITY, STATE ZIP
Important message about your failure to file an annual information return or electronic notice
Your organization’s tax-exempt status has been revoked
We haven’t received a response to the
previous notice we sent asking you to
file your annual information return or
electronic notice. Because you haven’t
filed for three consecutive years, your
organizations tax-exempt status has
been revoked as required by law,
effective Month 99, 9999.
You are no longer tax-exempt;
therefore, you can’t receive taxdeductible contributions. Your
organization’s name will be included on
our list of organizations that are no
longer tax-exempt. This list is
published on www.irs.gov/eo and
available to the public, state charity
officials, and state tax officials.
Next steps
What you need to do
 Since your organization is no longer tax-exempt, you may be
required to file the appropriate federal income tax return:
– U.S. Corporation Income Tax Return (Form 1120), or
– U.S. Income Tax Return for Estates and Trusts (Form 1041).
For information on Who Must File or When To File, review the
Instructions for Form 1120 and Form 1041. Download Instructions from
www.irs.gov, or call 1-800-TAX-FORM (1-800-829-3676) to request a
copy.
 Contact your state to determine how the revocation affects your state
responsibilities and requirements.
If you want to reinstate your tax-exempt status
 Apply for tax- exempt status by filing the appropriate application
(Form 1023 or Form 1024) and pay the user fee:
– 501(c)(3) organizations complete an Application for Recognition
of Exemption Under Section 501(c)(3) (Form 1023)
– 501(a) organizations (other than 501(c)(3) organizations)
complete an Application for Recognition of Exemption Under
Section 501(a) (Form 1024), and a User Fee for Exempt
Organization Determination Letter Request (Form 8718)
Note: An application is necessary for reinstatement even if you
weren’t originally required to apply for tax-exempt status.
 Submit your completed application with a check or money order for
your user fee to:
Internal Revenue Service
P.O. Box 12192
Covington, KY 41012-0192
Reinstatement of Exemption
 An
organization revoked under § 6033(j)
must apply to have its tax-exempt status
reinstated, even if it wasn’t originally
required to apply for exemption.
 If the application is approved, the
effective date of exemption will be the
date the application was submitted.
 If the applicant can show to the
satisfaction of the IRS evidence of
reasonable cause for failure to file for
three consecutive years, reinstatement
may be retroactive to the date of
revocation.
Transition Relief
The IRS will treat a small organization (one that normally has annual gross
receipts of not more than $50,000 in its most recently completed taxable
year) as having established reasonable cause for failing to file a Form 990N e-Postcard or an annual return for its taxable years beginning in 2007,
2008, and 2009, and the organization will be eligible for a $100 (rather than
$400/$850) user fee, if it meets each of the following criteria:

The organization was not required to file annual information returns
(such as Form 990, Return of Organization Exempt from Income Tax or
Form 990-EZ, Short Form Return of Organization Exempt from Income
Tax) for taxable years beginning before 2007.

The organization was eligible in each of its taxable years beginning in
2007, 2008, and 2009 to file a Form 990-N e-Postcard (rather than an
annual information return). Generally organizations (other than private
foundations and most section 509(a)(3) supporting organizations) with
annual gross receipts that were normally not more than $25,000 in such
taxable years would have been eligible to file a Form 990-N e-Postcard.

On or before December 31, 2012, the organization submits to the IRS a
properly completed and executed application for reinstatement of taxexempt status.
For more information…
 Visit
the IRS Charities & Non-Profits website
at www.irs.gov/eo
 Call
TE/GE Customer Account Services
(877) 829-5500 (toll-free)
 Subscribe
to EO Update to get the latest
updates for Exempt Organizations
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©2011 National Council of Nonprofits | www.councilofnonprofits.org