There were 275,000 names on the list of organizations that have automatically lost tax-exempt status. Earlier guesses were that the list, published by the IRS on June 8, might have included as many as 200,000 names.
In 2006, Congress passed a law requiring all tax-exempt organizations to file a report annually with the IRS. The new part was that for smaller organizations the law created a new form, called the “e-postcard” 990-N. Small organizations had never been required to file such a report before. And this new law said that any organization that failed to file a report for three consecutive years would automatically have its tax-exempt status revoked. The 275,000 organizations on the list the IRS released on Wednesday were ones that have not filed for more than three years, and missed many mailings and press releases (and, ahem, Idealist blog postings) about the new rules.
Is my organization on this list?
The Chronicle of Philanthropy has a searchable database of the whole list of online. I found 39 names in my Seattle ZIP code in just a couple of seconds. The IRS itself also posted the list, in the form of state-by-state Excel files that can be downloaded.
What happens now?
For organizations that aren’t on that list, nothing. To double check on exempt status for any organization, look in IRS Publication 78 or the corresponding online database.
For organizations that find themselves listed, the IRS has set up a special process to facilitate reinstatement. All the details are explained in an IRS statement about the process. Small organizations may be able to retroactively returned to exempt status for $100; larger organizations may find the process more difficult and more expensive.
The National Council of Nonprofits has a detailed Tipsheet [PDF] with advice about what an organization finds its name on the list when it shouldn’t be.
One lesson here is that very small, all-volunteer organizations need to take extra care to be sure legally required annual filings are taken care of – not just to the IRS but to state and local government reports as well. What strategies do you use to stay on top of this sort of do-or-die date on your calendars?