In 2006, Congress passed into law, the Pension Protection Act (PPA) that required most tax-exempt charities to provide an annual notice to the IRS providing various required information. Based on 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 necessary 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 very first list of organizations that had been automatically revoked following failure to submit the necessary notice for 3 consecutive years. There have been 275,000 organizations that have been revoked from their tax-exempt statuses in this release.

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Listing of Revoked Organizations

The list 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 ensure that the organizations that they are donating to aren’t marked as “revoked” in the IRS’s books. This list of revoked charities can be acquired at the IRS website and could be sorted by name or state for easier reference. The IRS has also indicated that they will be updating the list on a regular basis as more organizations escape compliance and are included with the list.

Efforts by the IRS to Ensure Compliance

Because the passing of the Pension Protection Act, the IRS has embarked on an awareness campaign to create qualifying charities aware of the newest requirements and to ensure they comply with the rule. There have been various educational forums to create charities aware of the newest rules. The IRS has also sent over 1 million letters to organizations that had not even complied to have them comply before they’re forced to be revoked. 慈善團體 Furthermore, the IRS has also extended the time for automatic revocation because the 3 year non-compliance time period for large charities should have ended in 2009. The full time frame for small tax exempt charities that have been to start reporting in 2007 should have lapsed in 2010.

Relief for Small Charities

The IRS is aware that some small charities has 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 into any donation complications). Tax-exempt organizations that receive donations of less than $50,000.00 can gain status backdated to the time of revocation if they affect be reinstated and pay a diminished fee of $100.00 in place of the regular fee of $400.00 or $850.00.

Implication on Donors

For donors, funds or aid provided to these revoked organizations ahead of the revocation remain deductible for tax purposes. However, moving forward, a donor cannot make a donation to the revoked organizations and deduct such donations inside their tax returns. Therefore, it is advisable for a donor to check on with the IRS’s list of revoked organizations before generally making donations to avoid any inconveniences during tax time.

How to be Reinstated

The IRS believes that a vast most of the charity organizations which have been revoked are defunct and therefore, you will find no consequences to the revocation. However, organizations which have been revoked but which are still operational still get the chance of getting back into compliance. To do this, they’ll be required to perform a new application for registration and pay the relevant user fee. The payment of the fee also applies for organizations that have been otherwise exempt ahead of the revocation. However, to steer clear of the embarrassment of being listed on the revoked list, the IRS advises all tax-exempt organizations to ensure they supply the relevant documentation for them in good time.

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