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News & Press: Nonprofit Sector

IRS Releases List of Revoked Nonprofits

Thursday, June 9, 2011   (0 Comments)
Posted by: Matt Mullenix
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The IRS has issued a much-anticipated list of 275,000 nonprofits nationwide whose federal tax-exempt status has been revoked.  

[Click here for background on this issue from LANO]

The announcement of these revocations comes after Congress imposed an annual filing requirement for all nonprofits and an automatic revocation penalty for those that do not file for three years in a row.  

Required to file are most federally tax-exempt organizations, with the exception of churches and state institutions.  Click here for more on who should file.

The list given for Louisiana includes 4,222 organizations, encompassing a wide spectrum of missions. Click here to download full Louisiana list.

The numbers of organizations listed in Louisiana's major cities include:

New Orleans: 837 
Baton Rouge: 554 
Shreveport: 240 
Lafayette: 165 
Lake Charles: 111 
Monroe: 97 

By definition, all listed organizations failed to file with the IRS for at least three years.  

It is unclear how many listed organizations are currently operating; and many of the listed organizations may qualify for special exceptions (see below for more information).  

Furthermore, the list contains typographical and possibly other errors that may cause confusion.

LANO encourages all nonprofits to check for their organization on the list and, if necessary, to contact the IRS with questions as to their current nonprofit status.

How do I know if my organization is on the list?

Click here to download full Louisiana list.  

Are there any exceptions to automatic revocation?

The IRS lists 15 significant exceptions, mostly related to churches and government agencies.  Click here to see if any of these may apply to your organization.

What should a nonprofit do now that it is no longer tax-exempt?

LANO's national affiliate, the National Council of Nonprofits, has developed a special webpage and tip sheet on options available to organizations. 

Nonprofits that re-apply may request in a letter to the IRS that the reinstatement of their tax-exempt status be retroactive to the date of their original tax-exempt recognition, but the IRS will grant that request only if it determines that there was "reasonable cause” for the nonprofit to have missed the filing deadlines. 

Make sure to carefully follow the instructions on the IRS website for requesting "retroactive reinstatement” of your organization’s tax-exempt status. 

Can a nonprofit raise funds while it is not tax-exempt?

Yes, but the nonprofit needs to be transparent and honest about the fact that it is not currently tax-exempt and, therefore, that contributions to it are not deductible to the donor.

Do we have other options for raising money?

Consider finding a fiscal sponsor: A nonprofit may want to explore partnering with a fiscal sponsor which can provide the nonprofit with the opportunity to continue to receive gifts that are tax deductible to the donor. Read about fiscal sponsorship.

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