As you may know, last week the IRS released a list of nonprofit organizations that have had their tax-exempt status revoked. On the Automatic Revocation of Exemption List were 1,367 organizations from Miami and that’s not including surrounding cities (i.e. Miami Beach, Aventura, Hialeah, etc.). The good news is that the IRS believes that most of these organizations are defunct. Needless to say, you should still take the time to go through the list to make sure you are not on it.
Losing your tax-exempt status is a big deal. It means:
- Your organization will have to pay taxes
- Your donors contributions will no longer be tax-deductible
- Your organization will be disqualified from applying for / receiving grants that require tax-exempt status
If your organization is listed, there are a few things you should know.
- Why is your name on the list? “Organizations … did not file legally required annual reports for three consecutive years” – IRS News Release
- When does this become effective? “the 15th day of the 5th month after the end of the organization’s taxable year” – IRS Notice Regarding Effective Date of Revocation
- What’s the next step? The IRS’ details next steps, including links to the necessary forms and a fee schedule) on their fact sheet
I wrote this post to give a quick overview, but please be sure to click on the links to learn more about each item, as the IRS gives detailed information on each. Also, check out www.stayexempt.irs.gov for free workshops and e-courses to ensure you know all the benefits of your tax-exempt status and what you need to do to keep it. I would suggest having a few people from your organization do this. It’s important to preserve organizational memory even with volunteer/staff turnover.
Find more information and answers to your questions on www.irs.gov.