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Automatic Revocation

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IRS Definition

Most tax-exempt organizations other than churches and certain church-related organizations are required to file an annual information return or notice with the IRS.

Organizations that do not file for three consecutive years automatically lose their tax-exempt status. An automatic revocation is effective on the original filing due date of the third annual return or notice.

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It is crucial for tax-exempt organizations to file the annual return as required. Once the IRS revokes tax-exempt status, there is no appeals process and the organization must file a tax return such as Form 1120 or 1041 until tax-exempt status is reinstated. The organization must reapply to obtain tax-exempt status. This will likely affect the organization at the state level as well.

Learn about unfiled tax-exempt organization returns.

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