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Automatic Exemption Revocation for Non-Filing: Effect of Losing Exemption

What is the effect of automatic revocation on an organization?

An organization that has lost its tax-exempt status through automatic revocation may be required to file one of the following federal income tax returns and pay any applicable income taxes:

  • Form 1120, U.S. Corporation Income Tax Return, due by the 15th day of the 3rd month after the end of an organization’s tax year, or
  • Form 1041, U.S. Income Tax Return for Estates and Trusts, due by the 15th day of the 4th month after the end of an organization’s tax year.

In addition, a section 501(c)(3) organization that loses its tax-exempt status cannot receive tax-deductible contributions and will not be identified in the IRS Business Master File extract as eligible to receive tax-deductible contributions, or be included in Exempt Organizations Select Check (Pub 78 database).

To have its tax-exempt status reinstated, the organization must file an application for exemption. An organization may also request retroactive reinstatement as part of its application.

Page Last Reviewed or Updated: 20-Oct-2016