Automatic Revocation of Nonprofit Exemption

Earlier this month the IRS published a list of approximately 275,000 nonprofit organizations that have officially lost their tax-exempt status. This automatic revocation of exemption is the result of a provision of the 2006 Pension Protection Act (PPA), Section 6033(j). It stipulates that any organization who fails to file an annual informational report with the IRS for three consecutive years will be penalized in this manner. This report should be filed via Form 990, 990-N, 990-EZ, or 990-PF.

Why this is important…
If your organization has filed one of the Forms listed above, it should not be on the IRS list. However you may also want to check make sure any other organizations you are affiliated with or donate to are also in compliance. If you happen to donate to a charity or nonprofit who is no longer tax exempt, not only will your gift be disallowed, but you may be required to pay a penalty as well.

Determining compliance
If you are concerned about the compliance of any nonprofit organization, you can view the published list by clicking here.