IRS in a statement in June 8th 2011 and as well as updated and posted on April 14th 2014 on their website points out that approximately more than 275,000 non-profits have lost their tax-exempt cases because of non-compliance with the rule of IRS for not filing annual tax returns for consecutive three years. Though this number is only an approximation as released and can find in IRS website under separate lists of affected organizations of each state in USA, the failing small non-profits who must file the annual electronic notice 990-n the e-postcard are also among the auto-revocation list of IRS.
IRS Cancels Tax-Exempt Status for 275,000 Nonprofits – Fail to FIle Returns
While Section 6033(a) of the Tax Code requires most tax-exempt organizations to file annual information returns, the Pension Protection Act of 2006 imposed a filing requirement on small organizations for the first time in 2007.However IRS campaign for promoting the importance of filing the annual electronic notice 990-n for small non-profits and charitable organizations was as though unheard and unaware and so the section 6033(j) of IRC is therefore imposing the withdrawal of tax-exemption for these non-profits and charitable organizations.
What happens when non-profits lose their tax-exempt status due to non-filing annual tax returns 990-n the e-postcard for consecutive three years? Yes it’s obvious that they lose the privilege of collecting the tax-deductible charitable contributions from donors and also they are forced to file their annual tax returns under corporate income tax law as applicable and which will take away their very texture of being a charitable organization and put them with the burden of losses through taxes that a corporate may face with IRS.
But IRS wholeheartedly helps the small non-profits and charitable organizations with a solid solution that are undergoing the misery of tax burden and automatic revocation of tax-exempt status due to the failure of not filing the annual electronic notice 990-n the e-postcard for consecutive three years. Now small non-profits and charitable organizations who are supposedly fail to file the annual electronic notice 990-n for consecutive three years now can file an application form 1023 for tax-exemption purpose requesting for reinstatement to continue as tax-exempt.IRS is very considerate for charging them with $100 for reinstatement instead of usual fees normally charged as $400 or $850 depending on the case that varies.
A genuine reasonable cause explanation by these non-profits and charitable organizations with a kind of actual happenings on why they failed to fail the annual electronic notice 990-n will also make IRS to re-consider the decision towards reinstating them back to the normal course of being a tax-exempt. This shows the heart of IRS as federal structure as balanced with a good intention to help the genuine charities doing the services for people of states and for nation cause.
Now small non-profits and charities have to realize their responsibilities as good social organizations doing good services should avoid the unnecessary complications between the process of automatic revocations and re-instatements by just delivering their nation’s duty by filing the annual electronic notice 990-n by 15th day of the 5th month (May15th 2014) based on their annual close of their income and expenditures accounts as on December 31st 2013.
IRS has approved and certified http://www.ETAX990N.com as a service partner for easy filing of the simple e-postcard 990-n for small non-profits and charities concerned.
Register Now and file your Form 990N tax