Reinstatement of Tax-Exempt Status after Automative Revocation

IRS Provides Procedures for Reinstatement of Tax-Exempt Status After Automatic Revocation (Rev. Proc. 2014-11)

I have helped organizations get their Tax-Exempt status reinstated after they failed to file a Form 990 for 3 years.  One claimed that they had extensions but just never filed the returns.  The IRS has procedures for reinstatement of tax-exempt status for organizations that have had their exempt status automatically revoked for failure to file required annual returns. An organization that failed to file Form 990-EZ or Form 990-N for each of three consecutive years and, as a result, had its tax-exempt status automatically revoked may apply for streamlined retroactive reinstatement of its exempt status if it applies within 15 months of the later of the date of the revocation letter or the date on which the organization’s name was posted by the IRS on its Revocation List. A procedure, subject to the same time constraints, is also provided for organizations that are not eligible to use the streamlined procedure, such as organizations with annual gross receipts exceeding $200,000.

Also addressed is the procedure for applying for retroactive reinstatement more than 15 months after revocation, as well as reinstatement of exempt status from the postmark date of the application. The guidance sets forth details of the reasonable cause statement that must accompany the application for reinstatement, including factors that are weighed by the IRS to determine reasonable cause. Finally, the procedure addresses automatic revocations subsequent to reinstatement.
The new procedure is effective for applications submitted after January 2, 2014. Transition relief is provided. Notice 2011-44, I.R.B. 2011-25, 883, is modified and superseded.