As we noted in an
earlier alert, organizations that failed to file returns for
tax years 2007, 2008, and 2009 will automatically lose their exempt
status this year. On July 26th, however, the IRS announced a
one-time relief program for some organizations that will give them
a "pass" until October 15, 2010. This program applies
only to small organizations eligible to file Form 990-N or Form
990-EZ for each of the last three years.
The IRS posted a list of the organizations at-risk of losing their
tax-exempt status, at least according to IRS records. If there is
any doubt about filing status, organization managers may want to
review this list to confirm whether or not their organizations are
at risk. However, organizations should not assume that the absence
of their names from this list means that they are in the clear. The
IRS acknowledges that the list may be incomplete and certain
organizations at risk of automatic revocation may not be listed.
So, if in doubt, organizations should also double-check their own
records to verify that they have filed returns in the past three
years.
Two types of relief are available:
- a filing extension for the smallest organizations required to file Form 990-N
- a voluntary compliance program ("VCP") for small organizations eligible to file Form 990-EZ.
To become compliant, small organizations required to file Form
990-N can go to the IRS website and electronically file it by
October 15th. The VCP program requires organizations to pay a
compliance fee in addition to filing delinquent returns by October
15th.
Importantly, the relief announced by the IRS is not available to
larger organizations required to file the Form 990 or to private
foundations that file the Form 990-PF.
Eligible organizations that have not filed the required returns by
October 15th will have their tax-exempt status revoked. The IRS
will publish a list of these revoked organizations in early
2011.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.