How can a Tax-Exempt Organization apply for Reinstatement with the IRS?
The Pension Protection Act of 2006 "requires tax-exempt organizations to file annual information returns." Furthermore, the tax law also revokes the tax-exempt status for any organization that "fails to file required returns for three consecutive years."
The IRS has reported approximately "275,000 organizations have lost their tax-exempt status because they did not file the required annual reports for three consecutive years." Fortunately, these organizations still in operation can apply for reinstatement with the IRS.
How does an Organization apply for reinstatement with the IRS?
Per the IRS, "an organization wishing to reinstate its tax-exempt status must file an application for exemption and pay the appropriate user fee even if it was not required to apply for exempt status initially."
The IRS has stated that "Organizations with annual gross receipts of $50,000 or less for 2010 can pay a reduced application fee of $100 instead of the typical $400 or $850 fee." Further, the IRS has stated "that the effective date of reinstatement will be the date the exemption application was submitted to the IRS and retroactive reinstatements must be requested at the time of application and will be granted under limited circumstances."
In additions, all Organizations applying for reinstatement should write “Automatically Revoked” on the top of their application.