Monday, July 11, 2011

For U.S. Charitable Organizations That Had Their Official Charity Status Revoked By the IRS, June 2011

On Friday, June 10, 2011, in every state in the United States (U.S.), different numbers of nonprofit organizations initially designated officially as "charities" by the United States Internal Revenue Service (IRS) had their official status revoked by the IRS (thereby ending their right to raise tax free dollars (donations), among other rights and responsibilities given to nonprofit charities).

To quote the IRS' own Charities & Non Profits web site's Automatic Revocation of Exemption web page's explanation, "Most tax-exempt organizations are required to file an annual return or notice with the Internal Revenue Service. (See Annual Return Filing Exceptions for a list of organizations that are not required to file.) Section 6033(j) of the Internal Revenue Code automatically revokes the exemption of any organization that fails to satisfy its filing requirement for three consecutive years. The automatic revocation of exemption is effective as of the due date of the third required annual filing or notice." The IRS' Automatic Revocation of Exemption web page (from which this quote came; this link is the second one in this paragraph, above) has basic information on this situation, including Frequently Asked Questions.

In the IRS' June 8, 2011 news release on this revocation, they explain, "The Internal Revenue Service today announced that approximately 275,000 organizations under the law have automatically lost their tax-exempt status because they did not file legally required annual reports for three consecutive years. The IRS believes the vast majority of these organizations are defunct, but it also announced special steps to help any existing organizations to apply for reinstatement of their tax-exempt status.

"Congress passed the Pension Protection Act (PPA) in 2006, requiring most tax-exempt organizations to file an annual information return or notice with the IRS. For small organizations, the law imposed a filing requirement for the first time in 2007. In addition, the law automatically revokes the tax-exempt status of any organization that does not file required returns or notices for three consecutive years.

"For several years, the IRS has made an extensive effort to inform organizations of the changes in the law through multiple outreach and education avenues, including mailing more than 1 million notices to organizations that had not filed. In addition, last year the IRS published a list of at-risk groups and gave smaller organizations an additional five months to file required notices and come into compliance. About 50,000 organizations filed during this extension period. Overall, the IRS believes the vast majority of small tax-exempt organizations are now in compliance with the 2006 law."

Helpful Resources for Revoked Charities:

The list of all nonprofit charities that had their official charitable status revoked June 8, 2011 is located here

A list of frequently asked questions, pertaining to the revocations, and answers are here

A handy IRS revocation fact sheet that includes all pertinent information and more on charitable organizations is located here

An explanation of the due dates of the forms that charities are expected to file to remain in good standing is here

The IRS explains how a charity that had its official charitable status revoked may be able to have it reinstated, first here and then in greater detail, here and this revocation has involved so many U.S. charities, that the IRS, on their You Tube channel has placed a video that also explains how a revoked charity may be able to get its official charitable status back.  That may be watched, here

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