The Internal Revenue Service is giving organizations that have had their tax exemptions revoked because they failed to file a tax return a way to revive their tax-exempt status.
Revenue Procedure 2014-11 provides procedures for reinstating the tax-exempt status of organizations that have had their tax-exempt status automatically revoked under Section 6033(j) of the Tax Code for failure to file required annual returns or notices for three consecutive years.
An organization that was eligible to file either the Form 990-EZ, “Short Form Return of Organization Exempt from Income Tax,” or Form 990-N, “e-Postcard,” for each of the three consecutive years that it failed to file, and that has not previously had its tax-exempt status automatically revoked, can use a process described in the revenue procedure to apply for a streamlined retroactive reinstatement of its tax-exempt status if it applies within 15 months after the later of the date of the revocation letter, or the date on which the IRS posted the organization’s name on a revocation list.
An organization that is not eligible to use the streamlined process can use another process described in the revenue procedure to apply for retroactive reinstatement of its tax-exempt status if it applies no later than 15 months after either the date of the revocation letter or the date on which the IRS posted the organization’s name on a revocation list.
The revenue procedure does not apply to groups that have had their tax-exempt status revoked because they engaged in political election-related activities. The IRS has faced controversy over the past year because of delays in approving tax-exempt status for Tea Party-affiliated groups and recently announced proposed regulations for how it would determine whether groups meet the definition of a social welfare organization under Section 501(c)4 of the Tax Code (see Treasury and IRS Issue Guidance for 501(c)4 Tax-Exempt Social Welfare Organizations).
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