Did Your Non Profit Lose its Tax Exempt Status?
Essex & Associates::www.essexinc.biz June 19, 2011
The Internal Revenue Service said Wednesday, June 8 that approximately 275,000 organizations have automatically lost their tax-exempt status under the law because they did not file legally required annual reports for three consecutive years.
Congress passed the Pension Protection Act 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.
Going forward organizations that are on the auto-revocation list that do not receive reinstatement are no longer eligible to receive tax-deductible contributions, and any income they receive may be taxable.
Existing organizations that seek to have their tax-exempt status reinstated must complete an application and pay a user fee regardless of whether they were originally required to file such an application.
More information on the reinstatement process, including retroactive reinstatement, can be obtained through a professional tax preparer.
Wishing you many happy returns,
Wayne T. Essex Ph.D.
Essex & Associates
Tax, Accounting, HR, Payroll
7501 Paragon Road
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