The saying charity begins at home applies to nonprofit organizations, too. By taking care of your organization first, you’ll keep your nonprofit’s name off the Automatic Revocation of Exemption List and be able to continue receiving tax deductible contributions.
The list, compiled by the IRS and updated monthly, contains the names of tax exempt organizations that failed to meet federal tax filing obligations for the past three years. Tax exempt status is automatically revoked for those organizations, as required by law.
Since there is no appeal process, the only way for your organization to regain tax exempt status—and the ability to receive tax-deductible contributions—is by filing Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code (or Form 1024 for other types of charities). That’s true even if you did not have to file an application initially. You may have to reapply for tax exempt status under the laws of your state as well.
How can you stay off the Automatic Revocation of Exemption List? Unless your organization is statutorily excluded from filing, you need to complete and submit an annual information form such as Form 990, Return of Organization Exempt from Income Tax. Smaller organizations may file Form 990-N, which is also known as an e-postcard. Whichever form applies to your organization, the due date for calendar year filers is May 15.
So keep an eye on the business of running your charity. For nonprofits, charity does indeed begin at home—in the home office, that is.