DEADLINE
APPROACHING:
Small
tax-exempt organizations still have time to pay the reduced use fee with an
application for reinstatement of tax-exempt status with the IRS, but the deadline is
approaching. According to
IRS Revenue Procedure 2011-36, applications must be
postmarked no later than December 31, 2012.
WHY
DOES THE IRS AUTOMATICALLY REVOKE TAX-EXEMPT STATUS?
The
IRS automatically revokes the tax-exempt status of organizations required to
file an annual return for failure to file the required annual return for three
consecutive years.
WHAT
IS THE DEFINITION OF A SMALL TAX-EXEMPT ORGANIZATION?
The
reduced user fee is only available to small organizations that normally have
annual gross receipts of not more than $50, 000
in their most recently completed taxable year.
WHAT
IS THE USER FEE?
For
an eligible organization, the amount of the
user fee that must be submitted with an application for reinstatement of
tax-exempt status postmarked by December 31, 2012 is $100.
WHAT
HAPPENS IF TAX-EXEMPT STATUS IS NOT REINSTATED BY DECEMBER 31, 2012?
The
IRS will no longer recognize the organization as tax exempt. After the December 31, 2012 deadline,
the organization must submit an application to the IRS and apply for tax-exempt
status (Form 1023 or Form 1024) and pay the applicable user fee ($400) and wait
for the IRS to issue a new Determination Letter on the exempt status of the
organization.
This
information was adapted from the Rev. Proc. 2011-36 on the Internal Revenue
website at www.irs.gov.
Rhonda Machalk, CPA
