Did your nonprofit organization lose your tax exempt status?
What’s this all about?
In 2010, the IRS has begun revoking the tax-exempt status nonprofit organizations that failed to file a Form 990/990EZ or 990N for three years. A large number of these organizations are small nonprofits that were not required to file an annual return (because their gross revenues were $50,000 or less) and didn’t know about the new IRS requirement.
If your organization has not filed any of the 990/990EZ or 990N forms for three years, it is likely your tax exempt status was revoked.
How will I know if my organization has lost its tax-exempt status?
You may have received a letter from the IRS called a CP120A.
What if we did not receive a letter from the IRS?
You may not have not received a letter because your address has changed or you are not in the IRS exempt organizations database. This is true for thousands of tiny organizations or clubs that were not required to file a Form 1023 or 1024 application to be tax exempt.
1. You can search the IRS database here: https://www.irs.gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check
2. If you don’t find your nonprofit’s name in the database, call the IRS Customer Service for exempt organizations at 877-829-5500. Give them your name and Employer Identification Number (EIN). Call early in the morning ( 7:30 or 8:00 am ET) for shortest wait times.
OK, I think our tax exempt status was revoked! Now what?
I can help. Read more here…
We have EIN and file 990N annually but fall under the classification of a group that makes less than $5000.00 a year. (Therefore have not filed with state or went through formal 501(c)3 process. I was talking with IRS today and I believe I understood them to say we do not give form to potential donor stating the contribution is tax deductible. If that is the case how can we assure potential donors we are tax deductible and doesn’t donor need documentation for when they file their taxes?
Mark, One of the major drawbacks for small 501c3 organizations who chose to “self-declare” their tax exempt status is that they lack the official IRS determinations letter proving that donations are tax deductible.
This important letter can give donors assurance that their donations are indeed tax deductible.
Technically, your organization can still receive tax deductible donations, but your organization lacks “proof” to show a donor.
The best way to assure potential donors would be to file the Form 1023-EZ (fee $275 to the IRS and takes about a week). Then you get the official IRS determination letter.
I can assist you in filing the Form 1023-EZ. While it is a much simpler form that the full Form 1023, it can be confusing and you will want to be sure it is filed correctly. Email me if you’d like my help,
Carol Topp, CPA