Reinstating Exempt Status
Reinstating Exempt Status
Is your nonprofit organization in search of what to do about reinstating exempt status with the IRS? As you’ve probably heard, the IRS dumped a truckload of nonprofit organizations from their list of organizations having tax-exempt status.
Roughly 275,000 non-profits were told they had better get busy reinstating exempt status after being revoked in June 2011 for failing to file Form 990 reports for three years in a row. This action by the IRS is in compliance with the Pension Protection Act of 2006 (PPA) that calls for more transparency and accountability for nonprofit organizations.
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Some experts in the nonprofit sector justify this action, stating that many organizations have simply fallen by the wayside and ceased operation. You know how it goes: a group of committed individuals unite for a single cause fueled by the desire to help others, but sooner or later the drive and determination to maintain the organization dissipates. Inertia takes over. Form 990 reports don’t get filed three years in a row, and BAM! The organization is defunct.
Other organizations, run strictly by volunteers, have also had to worry about reinstating exempt status after being revoked by the IRS for one of the following reasons:
- Volunteer leaders miscommunicated about who would be responsible for filing their IRS annual report.
- Nonprofit leadership were unaware the organization had to file annual reports to maintain tax-exempt status.
- “No consequences = no action” – for many years there wasn’t a penalty for failing to file 990’s, so many busy non-profit leaders didn’t file.
- As with many Big Brothers/Big Sisters chapters, local and state chapters assumed a national organization’s tax status had them covered. It didn’t.
You can bet that a number of organizations were surprised to learn their tax-exempt status was revoked. That means reinstating exempt status has become a priority – perhaps even for you.
How can my organization go about reinstating exempt status?
The IRS recognizes the conundrum nonprofit organizations have if their tax-exempt status has been revoked. Instead of making organizations jump through myriad hoops for reinstating exempt status, the IRS extended the filing period to the end of 2012 for reinstatement. They also greatly reduced the fee for filing for tax-exempt status from $400 and $850 down to $100.
An added bonus to filing for reinstating exempt status before the end of 2012 is the IRS lets your organization have tax-exempt status retroactive to the date your nonprofit’s exempt status was revoked. That means your organization doesn’t have to pay taxes for the time during which your organization did not have tax-exempt status. The benefit to the non-profit world is almost incalculable.
Your 501c3 organization must fill out IRS Form 1023 to regain what was lost – tax-exempt status. That means precious time, effort and money reinstating exempt status, ensuring that your paperwork is filled out properly. But now there is a fast, easy, and cost-effective solution. Our product, the Turbo 1023 Platinum, along with our team of experts can help put you ahead of the curve for reinstating exempt status so that your organization can do what it does best – provide services that touch an untold number of lives in a positive way.
What are you waiting for? Click here, and you can get a complimentary copy of my eBook which covers the dangers and pitfalls of filing your IRS Application for Tax-Exempt Status, and also find out about my Turbo 1023 Platinum Online 501(c)(3) Filing Service. You can also get access to some of our most popular online video training – FREE. We can make completing Form 1023 and all the addenda a breeze. Sign up now, and you can access the help of a trusted and proven professional, for 67-80% less than you’d pay an attorney, and get help reinstating exempt status ASAP!
And please, let me know if your organization’s tax-exempt status was revoked by the IRS and what difficulties your nonprofit has faced as a result at my personal email: firstname.lastname@example.org. Reinstating exempt status may not be as difficult as you think.