IRS to Speed Its Alerts on Groups That Lose Tax-Exempt Status

Early notice will help donors seeking charitable deductions

The IRS this month will start to give the public an earlier heads-up on organizations whose tax-exempt status has been automatically revoked for failure to file an annual information return or notice for three consecutive years.

In June 2011, the IRS announced that some 275,000 organizations had lost their tax-exempt status. Since then, it has posted information about groups that are no longer tax exempt six months after revocation.

This time lag was a problem for donors who contributed to an organization before finding out it was no longer tax exempt. The donors were then unable to claim a charitable deduction.

Now, the IRS said in a recent announcement, it would begin to provide more current information about revocations by including organizations on the Automatic Revocation List within a month of their effective date of revocation.

“Because of this change,” the IRS noted, “the number of organizations added to the list in March 2013 will appear higher than in other months because it includes a catch-up period of about seven months.”

Organizations that have lost their tax-exempt status can apply for reinstatement, the IRS said. However, they will remain on the list because it is an official IRS record.

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