In 2006, Congress passed into law, the Pension Protection Act (PPA) that required most tax-exempt charities to supply an annual notice to the IRS providing various required information. In line with the law, small tax-exempt organizations that received annual donations of $50,000.00 and less would start complying with the notice provision’s rules in 2007. Any organization that didn’t file the required information notice with the IRS for 3 consecutive years could be automatically revoked from its tax-exempt benefits. Following this law, in June 2011, the IRS released the initial listing of organizations that had been automatically revoked following failure to submit the required notice for 3 consecutive years. There have been 275,000 organizations that have been revoked from their tax-exempt statuses in this release.
Set of Revoked Organizations
The listing of organizations that has been released by the IRS in June 2011 indicates the names of the charities, the Employer Identification Numbers (EIN) of these organizations, and the addresses of the organizations as held by the IRS in its database. It is the responsibility of donors to verify that the organizations that they are donating to are not marked as “revoked” in the IRS’s books. This listing of revoked charities can be obtained at the IRS website and can be sorted by name or state for easier reference. The IRS has additionally indicated that they will be updating the list on a monthly basis as more organizations get out of compliance and are added to the list.
Efforts by the IRS to Ensure Compliance
Considering that the passing of the Pension Protection Act, the IRS has embarked on an awareness campaign to make qualifying charities aware of the brand new requirements and to ensure that they adhere to the rule. There were various educational forums to make charities aware of the brand new rules. The IRS has additionally sent over 1 million letters to organizations that had not yet complied to own them comply before they’re forced to be revoked. Furthermore, the IRS has additionally extended enough time for automatic revocation considering that the 3 year non-compliance time frame for big charities should have ended in 2009. 慈善機構 Enough time frame for small tax exempt charities that have been to begin reporting in 2007 should have lapsed in 2010.
Relief for Small Charities
The IRS is aware that some small charities might have been ignorant of the notice filing requirement and are therefore, providing a lenient method for these organization ahead into compliance retroactively from time of revocation (so that they will not enter any donation complications). Tax-exempt organizations that receive donations of significantly less than $50,000.00 can gain status backdated to enough time of revocation if they apply to be reinstated and pay a decreased fee of $100.00 as opposed to the standard fee of $400.00 or $850.00.
Implication on Donors
For donors, funds or aid provided to these revoked organizations prior to the revocation remain deductible for tax purposes. However, moving forward, a donor cannot produce a donation to the revoked organizations and deduct such donations in their tax returns. Therefore, it’s advisable for a donor to check with the IRS’s listing of revoked organizations prior to making donations in order to avoid any inconveniences during tax time.
How exactly to be Reinstated
The IRS believes that the vast most of the charity organizations which were revoked are defunct and therefore, you can find no consequences to the revocation. However, organizations which were revoked but that are still operational still have the opportunity of having back in compliance. To do so, they’ll be required to complete a fresh application for registration and pay the relevant user fee. The payment of the fee also applies for organizations that have been otherwise exempt prior to the revocation. However, to avoid the embarrassment to be listed on the revoked list, the IRS advises all tax-exempt organizations to ensure that they give the relevant documentation in their mind in good time.