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Davis Brown Tax Law Blog

Deadline Approaching to Avoid Losing Tax Exempt Status - May 8, 2014

May 15 is a key deadline for many tax-exempt organizations.  The Form 990 series returns are due on the 15th day of the 5th month after the end of the tax year. For most organizations that run on a calendar year, that deadline is May 15. Organizations will file one of the various forms of the Form 990 depending on the size of the organization. To determine what version of form 990 to file, the IRS has a webpage to guide you.

A law in place since 2007 automatically revokes the tax exempt status of organizations that fail to file their return for three consecutive years. The 2007 law also mandated filing requirements on small organizations that prior to 2007 were not required to file an annual return. Those two changes to the reporting requirements for tax-exempt organizations have combined to result in many organizations losing their tax exempt status for failure to file. These filing requirements also apply to organizations that are claiming to be exempt but have not yet received an IRS determination letter recognizing that status. As a result, an organization could lose its tax exempt status before it is ever granted. An organization risking losing its tax exempt status may or may not receive a notice from the IRS of their failure to file. As a result, some organizations are unaware the organization has or soon will lose its tax exempt status.

Once an organization has its status revoked, donors are no longer able to deduct their contributions. The organization can re-apply for tax-exempt status. In certain cases the tax exempt status will be reinstated retroactively. However, this is not guaranteed.

To check if a tax-exempt organization you are involved with, or donate to, remains eligible to receive deductible donations, you can search the IRS Exempt Organizations Select Check.