Your IRS wants to help you.
Since June 2011 IRS has released a monthly list of charities whose tax-exempt status has been revoked for failure to file the annual form 990 or one of its smaller siblings, the 990-EZ and 990-N postcard, for three consecutive years.
This was big news when the automatic revocation list was inaugurated and close to 300,000 charities were revealed.
Next month’s list will be larger than usual because IRS is changing the admission standard. It’s easier to get on.
Starting in March, charities will get one month notice that they’re facing revocation. Until now, you didn’t make the list until tax-exempt status had been revoked for six months.
March’s list will have a seven month catch up–all those revoked but not yet revealed, plus those soon to be revoked–so it will be much longer.
The service offers a search page. It’s bad news if you’re a hit. Here’s how to get tax-exempt status reinstated.
I don’t understand why only one month of advance notice. Why not three or four months? That would presumably be enough time to make a 990 filing and avoid the revocation. One month isn’t enough time to pull it together.
In any case, expect a longer revocation list in March from IRS. There’s something to live for.
I’ve been emailing a reporter and had a LinkedIn exchange with Sandy (above). Both are questioning whether the list will now include those one month ahead of revocation or those one month after revocation.
This sentence (from an IRS email):
Because of this change, the number of organizations added to the list in March 2013 will appear higher than in other months because it includes a catch-up period of about seven months.
leads me to believe it’s a month ahead of revocation. The 7 month catch-up would come from the charities that would have made the list over each of the 6 months yet to come, plus those that are 1 month ahead of revocation. Otherwise, how do you get to a 7 month catch-up?
I read the IRS announcement as saying they’ll now include charities that are facing revocation in one month. In other words, one month before revocation goes into effect.
I did not know there was once an at-risk list. That’s what I’m suggesting in asking why earlier notice isn’t provided. Answering my own question, it’s likely the Service doesn’t have a way to contact many of the charities on the list or soon-to-be.
I was tongue-in-cheek saying it’s easier to get on.
As I read it, there is NO advance notice at all. Until now, the IRS has been publishing the names of revoked non-profits six months after the revocation went into effect. With the March list, the IRS will instead be releasing the names of revoked non-profits only one month after the revocation goes into effect.
Some time ago, the National Taxpayer Advocate recommended that the IRS publish lists of organizations “at-risk” of losing their exempt status, giving these groups an opportunity to come into compliance. (Before they began revoking non-profits, the IRS did publish such a list.) The IRS responded to the Taxpayer Advocate by saying that the original at risk list was a one-time effort and would not be repeated.
It is NOT “easier to get on” the automatic revocation list. The standard has not changed. A non-profit appears on the list if it is required to file an annual return and fails to do so for three years in a row.