IRS Says It Sent Premature Tax-Exemption Revocation Notices

IRS Says It Sent Premature Tax-Exemption Revocation Notices

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While the agency's statement said that organizations that attempted to file electronically by July 15 were not listed in that database, it did include some entities that lost their tax-exempt status on May 15, the original filing deadline for most nonprofits, according to the Tuesday letter from the House Democrats.

That discrepancy could suggest that the issue is greater in scope than currently understood, according to David Thompson, vice president of public policy for the National Council of Nonprofits. While tax-exempt organizations can work on resolving issues related to the premature revocations, losing exempt status temporarily can cause confusion that could deter donors and especially hurt smaller nonprofits, Thompson told Law360 Friday.

"Any extra money spent on a fiscal agent, spent with lawyers to fix the problem, means their mission is not being advanced," Thompson said.

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Law360
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