IRS Sends Erroneous Automatic Revocation Notices

Most tax-exempt organizations have an annual Form 990 filing requirement, and organizations that fail to file the required Form 990 for three consecutive years will have their exempt status revoked. This past spring, notices of revocation were automatically sent to organizations after the May 15 filing deadline, despite the fact that these filing deadlines had been extended to July due to the pandemic. The IRS stated that the program that issues the revocation notices was not capable of having the deadlines updated, so some 30,000 tax-exempt organizations received the notifications prematurely.

Democrats on the House Ways and Means Oversight Subcommittee sent a strongly worded letter to Treasury Secretary Steven Mnuchin and IRS Commissioner Chuck Rettig demanding the IRS investigate and take corrective action immediately to alleviate the impact this error has had on exempt organizations that are doing “critically important work for our communities – especially during this difficult time.”

The IRS has taken steps to mitigate the impact on organizations that attempted to file electronically by the July deadline, by not listing these organizations on the IRS’s automatically revoked list on For organizations that filed paper returns by the July deadline, the IRS is currently processing those returns and reversing auto-revocation for those filers. However, due to the backlog of millions of pieces of unopened mail received by the IRS, many auto-revocations have yet to be reversed.

The IRS has set up a dedicated fax number (855) 247-6123 to receive documentation of filings from organizations that due to the backlog have not had their auto-revocation reversed.

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