Large Number of Exempt Organization’s Seek Retroactive Reinstatement from the IRSPosted on March 27th, 2012.
As we blogged a few months ago, the IRS has automatically revoked the tax-exempt status of organizations who did not file an information return for the prior three years. To date, more than 433,000 exempt organizations had their tax-exempt status revoked as a result. The IRS believed that such automatic revocation would “clean the books” and remove all the organizations who have not been operating for years. However, the IRS is now surprised as the large number of applications that have been resubmitted to the IRS to reinstate their tax-exempt status. The IRS Tax-Exempt and Government Entities Division, estimates that about 14,000 organizations have reapplied at this point. This number is set to increase as the end of the year approaches because the transitional relief allowed for small organizations will expire at the end of the year.