IRS Prematurely Issues Auto-Revocation Notices To Exempt Organizations

The IRS released a statement admitting that they sent certain tax-exempt organizations premature auto-revocation notices in error.

History. Most tax-exempt organizations are required to file some version of Form 990, an information return filed by tax-exempt entities to report their financial and other information to the IRS. Exempt organizations that fail to file a Form 990 for three consecutive years are automatically revoked

Form 990 Due Date. Generally, Form 990 is due by the 15th of the fifth month after the conclusion of the tax year. For taxpayers with a December 31 year-end, the due date for Form 990 is usually May 15. This year, however, the IRS extended the due date for Form 990 from May 15 to July 15, 2020, due to the pandemic.

What Happened? Apparently, when the 990 due dates were extended, the IRS was unable to adjust its program that sends auto-revocation notices to conform to the new extended deadline. This caused some premature auto-revocation notices to be sent out in error.  

What Do if Your Nonprofit is Affected. The IRS has already sent some notices to tax-exempt organizations that received the premature notices. The IRS has also set up a dedicated fax number (855) 247-6123 to receive correspondence from organizations wishing to appeal a premature auto-revocation and provide evidence of their Form 990 filings. While the IRS is working on correcting the problem, it may take 30-45 days for this to happen. In the meantime, the IRS website does have a list of organizations on the auto-revocation list. If your nonprofit is on the list, your organization can be reinstated by contacting the Exempt Organizations Account Unit.

Ellis Carter is a nonprofit lawyer with Caritas Law Group, P.C. licensed to practice in Washington and Arizona. Ellis advises tax-exempt clients on federal tax matters and fundraising regulation nationwide. To schedule a consultation with Ellis, call 602-456-0071 or email us at info@caritaslawgroup.com.

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