Automatic Revocation of Exempt-Status in Error

A nonprofit organization that fails to file an annual information return (Form 990 series) for three consecutive years, will automatically lose its tax-exemption.  This means the organization is no longer recognized as a tax-exempt organization by the IRS; contributions to the organization are no longer considered charitable deductions to the donor and the organization must file a for-profit tax return and pay any related income taxes.  Once the tax-exemption is revoked, the IRS will place the organization’s name on the Auto-Revocation List.

However, there have been instances where an organization met its filing requirement for one or more years during the three-year period but the IRS revoked its tax-exempt status.  If you believe your organization’s tax-exempt status was incorrectly revoked, you will need to send documentation (an IRS receipt for a filed return, for example) that shows you have not failed to file for three consecutive years to the Exempt Organizations Account Unit at the following address or fax number:

Internal Revenue Service

1973 North Rulon White Blvd

M/S 6552

Ogden, UT 84404

Fax number –  855-247-6123

Once the proper documentation has been submitted and approved by the IRS, your organization’s name will be removed from the Auto-Revocation List.

If your organization failed to file a return for three consecutive years, see our previous blog (What If I Lose My Exempt Status?) on how to reinstate your exempt status.

Contributed by: Carrie Minnich, CPA, MAcct | Director | DWD CPAs & Advisors