regain your tax exempt status sandy deja (revised 11/19/11)
TRANSCRIPT
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Regain Your Tax Exempt Status
Sandy Deja(Revised 11/19/11)
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Learning Objectives1. Understand the Automatic
Revocation Process2. Learn practical steps to regain
tax exempt status3. How to prevent future loss of
tax exempt status 4. Where to go for help
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Automatic Revocations: Overview
If your organization was…- Required to file 990, and - Did not file for 3 years in a row
…then exempt status was revoked automatically
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Automatic Revocations: Overview
- Initial List June 8, 2011: 279,599 - Updates: 7/13, 7/25, 8/11, 9/8, 10/7,
10/14 and 11/9- Currently 392,899 (as of 11-9-11)- Reinstatements not removed- 2,500 removed; not clear why
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Revoked in Error: 990 Not Required
- Churches- Integrated auxiliaries- Church operated schools- Other church related- Government related [501(c)(1)]
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990 Not Required: What to do
- Determination Letter- Exemption Application
1-877-829-5500- Re-instatement Application- Not Form 8940
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Churches Remain Exempt…
…and eligible to receive tax deductible charitable contributions
But if you want it fixed, call 1-877-829-5500
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Revoked In Error: Actually Filed
990-N - - E-Postcard Filing not IRS- Urban Institute- Less Than Ideal Inter-Agency
Communication
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Actually Filed: What To Do
Send documentation to: Internal Revenue Service1973 North Rulon White BlvdM/S 6552Ogden, Utah 84404
FAX (801)620-555Phone 1-877-829-5500
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Actually Filed: Group Exemptions
IRS FAQ: “When a central org is revoked…”
- 136 Central orgs revoked (11/9)- Only option is to apply for
reinstatementOther kinds of problems as well…
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Applying for Reinstatement
If…- there is (still) a need for your non-
profit, and- you can muster the human and other
resources needed to sustain it …then go for it
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Applying for Reinstatement
IRS Guidance:- IRS Notice 2011-43
(Transitional Relief for small organizations)
- IRS Notice 2011-44(Requirements for retroactive reinstatement for larger organizations)
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No mention of Notice 2011-43
Transitional Relief!
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Transitional Relief: Benefits- Presumption of “Reasonable
Cause” for not filing- User Fee is reduced to $100
(Good through 12/31/2012)
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Transitional Relief: Eligibility
1. Annual gross receipts normally$50,000 or less,
2. Not required to file a paper Form 990 or 990-EZ before 2007, and
3. Eligible to file 990-N for2007, 2008 and 2009.
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Transitional Relief
Ineligible Organizations- Can still apply for reinstatement- Must pay regular User Fee- Must show reasonable cause for
not filing if seeking retroactive
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Transitional Relief: What To Do
- File an exemption application- Write “Notice 2011-43”
On top of ApplicationOn mailing envelope
- Attach Statement
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Transitional Relief: Statement
[Name of Organization] was not required to file annual information returns for taxable years beginning before 2007; was eligible in each of its taxable years beginning in 2007, 2008 and 2009 to file a Form 990-N e-Postcard; and had annual gross receipts of normally not more than $25,000 in each of its taxable years beginning in 2007, 2008 and 2009..
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File An Exemption Application
- Form 1023 or 1024- Don’t need new EIN- File with usual address
(not the one in the form)
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File An Exemption Application- Going concern
(If I were an agent, I would ask.)- Corporate status
(Is your group in good standing?)- Foundation Status - 501(c)(3)
(Check your public support.)
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File An Exemption Application
Resources:- IRS pubs, library, online courses- Classes, websites, referrals - Bar assn, CPA Society, United Way,
Nonprofit Assistance Center- Sandy Deja’s website and book
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An Unexpected Resource
Recycle Your Old Application:- 1023’s dated 2004 or later- 1024’s dated 1998 - Use Form 4506-A to get a copy
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Recycling An Old Application
Use “As Is”:- Unchanged governing documents *- Unchanged brochures, publications- Maps, photographs, floorplans and
similar items that remain the same* With proof of good standing
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Recycling An Old Application
Update These: - Narrative- Description of Fundraising- Eligibility for services- Legislative or business activities
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Recycling An Old Application
Create New:- Lists of Board members, employees,
independent contractors- Financial Statements, including
Projected Budget
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Final Recommendations
IRS Inquiry on previous application?
Not just for recyclers Describe how you plan to avoid
future problems
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Avoiding Future Problems
- Designate IRS officer & backup- Subscribe to IRS Update- IRS On-line or other training- Financial software or
knowledgeable professional
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Avoiding Future Problems- Board Recruitment- Association of non-profits
(links)- Professional societies - Agenda Item
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Reinstatement- Reinstatement applications
handled by agents who specialize- Favorable Ruling: Form Letter 947
or 948, with caveat, and effective date same as revocation date
- 100 days to reappear in Pub 78
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Links
- Copy of IRS Notice CP120Ahttp://www.irs.gov/pub/notices/cp120a_english.pdf
- Current Auto-Rev Listhttp://www.irs.gov/charities/article/0,,id=240099,00.html- “Churches remain exempt…”http://www.irs.gov/charities/article/0,,id=240100,00.html
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Links
- Copy of IRS Notice 2011-43http://www.irs.gov/pub/irs-drop/n-11-43.pdf
- Copy of Notice 2011-44http://www.irs.gov/pub/irs-drop/n-11-44.pdf
- Automatic Revocation FAQhttp://www.irs.gov/charities/article/0,,id=221600,00.html
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Links
- IRS Form 1023http://www.irs.gov/pub/irs-pdf/f1023.pdfhttp://www.irs.gov/pub/irs-pdf/i1023.pdf
- IRS Form 1024http://www.irs.gov/pub/irs-pdf/f1024.pdfhttp://www.irs.gov/pub/irs-pdf/i1024.pdf
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Links- How To Get Your Tax Exempt Status
Back (IRS 86 second You-Tube video)http://www.youtube.com/watch?v=hdrI1Swt1eI
- IRS “Stay-Exempt”http://www.stayexempt.irs.gov/ - IRS Publication 557http://www.irs.gov/pub/irs-pdf/p557.pdf