IRS Revokes Tax-Exempt Status for 13,000 Illinois Nonprofits

Tuesday, June 21, 2011

Paperwork The Internal Revenue Service released a list of Illinois nonprofit agencies whose tax-exempt status was automatically revoked on Thursday.

The agencies were among 13,217 statewide.

This announcement of the revocations comes years after Congress imposed an annual filing requirement for all nonprofits and an automatic revocation penalty for those that failed to file a 990 for three years in a row. But this announcement may not, in itself, be a bad thing.

“We believe a majority of the organizations have gone out of business and failed to report it to the IRS, or their names or addresses have changed,” says Laurel O’Sullivan, Vice President of Public Policy at Donors Forum. “Even with three years of outreach from organizations like ours, the Attorney General’s Office and the IRS, this clearly speaks to the need for continued capacity building for small to mid-size nonprofits. If there are organizations on the list, Donors Forum can help them navigate the first steps in the process.”

While the IRS has established a process for nonprofit organizations whose tax exempt status have been automatically revoked to redress the issue, the process can be costly and the paperwork complicated to file, depending on the size of the organization.

The IRS will update the list every month.

Download our FAQ here.

National Council of Nonprofits has a revocation resource page here.

~Delia Coleman, Public Policy Manager, Communications/Outreach

photo credit: http://www.flickr.com/photos/nerdcoregirl/4335907588/lightbox/ via Creative Commons