United States

IRS acknowledges auto-revocation errors

TAX ALERT  | 

In the Oct. 26, 2020, Exempt Organizations Update, the IRS acknowledged that some exempt organizations may have received an erroneous auto-revocation notice. Affected organizations can check their status through Tax Exempt Organization Search (TEOS) and contact the IRS via fax at 855.247.6123 to address any concerns.

Background

Section 6033(j) automatically revokes the exempt status of any organization that fails to file its required 990-series notice or return for three consecutive years. The effective date of revocation is the due date of the third return, and the IRS will send a written communication to affected taxpayers.

Due to COVID-19, the IRS automatically extended filings due from April 1 through July 14, 2020, until July 15, 2020. However, the IRS was unable to update its automated systems in a timely manner and generated notices to taxpayers that had previously missed two consecutive filings and would have had a third filing due between April 1 and July 14, 2020.

The IRS believes it prevented any organization that timely filed electronically by July 15, 2020 from appearing on the auto-revocation list posted on its website and in TEOS. However, it is still processing paper filings, which would reverse the auto-revocation for those taxpayers. 

Correction and communication

Any organization that received an erroneous auto-revocation notice may confirm whether its exempt status is still intact by searching TEOS. If it appears on the auto-revocation list, the taxpayer may submit proof of timely filing to the IRS via a dedicated fax number at 855.247.6123.

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