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
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