Has your Organization Lost its Tax Exempt Status?
Under the Pension Protection Act of 2006, all exempt organizations, even those considered small ($50,000 or less in gross receipts beginning in 2010, $25,000 or less prior to 2010), have been required to file an annual information return beginning in 2007. Many small organizations are not even aware of this filing requirement and have lost their exempt status, which is an automatic consequence for not filing for three consecutive years. The good news is that organizations can restore their exempt status.
For small organizations that were exempt from filing prior to 2007 and were eligible to file Form 990-N e-Postcard for 2007, 2008 and 2009, you only need to file the correct paperwork before December 31, 2012 and pay a reduced filing fee of $100 to have your exempt status restored retroactive to the date it was revoked.
Organizations that do not qualify for the above transitional relief for small organizations may also have their tax exempt status reinstated. The appropriate paperwork will need to be filed with the applicable fee. The reinstatement date will be the same day the reinstatement paperwork is filed.
Organizations that do not qualify for transitional assistance can also qualify for retroactive reinstatement, but will be required to provide satisfactory evidence of reasonable cause for failing to file for each year, as well as for the three year period as a whole. You will also need to:
- Describe safeguards put in place to prevent the failure to file in the future.
- Submit completed information returns for the years for which returns weren’t submitted.
- Provide a dated and signed original declaration.
All this must be completed and filed within 15 months of the later of the date of the IRS revocation letter or the date the organization’s name appeared on the revocation list.
If your organization has lost its exempt status, call Anstiss & Co. for assistance in getting it back.
Anstiss & Co. is a Lowell- based public accounting firm serving clients throughout the United States. The firm was founded by Ray Anstiss, Sr. in 1964, and is currently listed as a Top-35 Accounting Firm in Massachusetts by the Boston Business Journal.
