Lost Your Tax-Exempt Status? Here's How to Get it Back

Once you’ve gotten that coveted tax-exempt status for your nonprofit organization, it can be quite the job maintaining it. For some, it can even become a full-time job to ensure their organization remains tax-exempt, which is why it can be so devastating to learn that the IRS has revoked that status.

Losing Tax-Exempt Status
The most common reason organizations lose their tax-exempt status is failing to file a Form 990 return for three consecutive years. Of course, there are more insidious ways organizations can forfeit their status, but not filing for three years in a row can be indicative of these. And so organizations will automatically lose tax-exempt status, effective beginning the original due date of the third missed annual return.

When you lose tax-exempt status, the first thing the IRS will do is send a letter explaining the situation and how your organization is no longer exempt from federal income tax. Your organization will be added to the Automatic Revocation of Exemption List, which the IRS updates monthly.

During this time, your organization is no longer considered tax-exempt so normal federal income tax laws apply. Also during this time period, you’re no longer eligible to receive tax-deductible contributions however your donors can deduct contributions made before your organization is listed on the Automatic Revocation list. Keep in mind that there may also be separate repercussions with your state after your tax-exempt status is revoked.

If your organization is still operating while its tax-exempt status is revoked, you may also be required to file a federal income tax return and pay any applicable taxes with one of these forms:

• -Form 1120, US Corporation Income Tax Return, due the 15th day of the 3rd month following your tax year end date
• -Form 1041, US Income Tax Return for Estates and Trusts, due the 15th day of the 4th month following your tax year end date

And Getting it Back!
The most important thing to getting your tax-exempt status back is to act fast and thoroughly when going through the IRS’s reinstatement steps. It will really help here if you’ve been keeping detailed records of your organization’s revenue and expenses. So, first things first: to reinstate your tax-exempt status, you’re going to need to file another Form 1023 if applying under section 501(c)(3). If you’re applying under a different Code section, file Form 1024. Regardless of whether your organization was originally required to file one of these forms for tax-exempt status, you’ll need to file one again now.

You’ll also be required to pay the appropriate user fee the IRS will charge for your status reinstatement. The specifics of the amounts you owe will be explained in the letter the IRS sends to alert you of your status being revoked.

If needed, you can also petition for a retroactive reinstatement as part of your application. This is an important step to take if you believe your organization’s tax-exempt status being revoked was an error or unwarranted. If you don’t need retroactive reinstatement, pending your application’s approval, your organization’s new tax-exempt effective date will most likely be the date you submit Form 1023 or 1024 to the IRS.

Once you’ve been reinstated, it’s important to make every effort not to lose that status again! Be sure to file your 990 Form each year, keep meticulous records, and, of course, only use the benefits of your tax-exempt status for tax-exempt operations. And don’t forget that ExpressTaxExempt can help - like the Jackson 5, just call our name and we’ll be there!

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E-file Tax-Exempt Returns from Anywhere!

E-file Tax-Exempt Returns from Anywhere

For those of you running small exempt organizations, you know that you’re required to file an annual tax return with IRS. Even if your nonprofit or charity brought in little or no money for the filing year, you still need to report that fact to the federal government.

Filing for tax-exempt organizations can take a lot of time and paperwork - or it used to. If your tax-exempt group makes less than $50,000 a year, you can now e-file your tax return in minutes with ExpressTaxExempt.com. And the best part - you don’t need to be anywhere near a desk or computer at all!

ExpressTaxExempt - Form 990-N App
With this FREE downloadable mobile app, you can e-file IRS Form 990-N (e-Postcard) at anytime and anywhere from your favorite iOS or Android devices and handsets. Complete the entire filing process in less than 10 minutes - all you need is your basic organization details, tax year period, and confirmation of $50,000 or less in gross receipts.

Your form is checked for any errors before you submit to the IRS, and you’ll receive an email confirmation of approval soon after transmitting your form. The information goes directly to the IRS and nowhere else. If your return gets rejected, the app identifies the mistake so you can correct it and resend with no additional charges.

ExpressTaxExempt - Form 8868 App
For other exempt organizations with gross receipts over $50,000, and you need more time to file your IRS Form 990 or 990-EZ, you can also e-file the IRS Form 8868 tax extension at your convenience from iOS and Android tablets.

You can e-file your extension in just minutes with your organization’s basic information and tax year period - you’ll also need to select which IRS form you typically file for your tax-exempt group. Like the 990-N mobile app, your return gets scanned for any mistakes, and you gain access to PDF copies of your transmitted tax form.

We’re here to offer you the easiest, most streamlined filing experience so you can stay compliant with the IRS and quickly get back to running your organization smoothly. Contact us at 704.839.2321 for any questions or help e-filing to the IRS. We’re also available 24/7 with support@ExpressTaxExempt.com.

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E-file Form 990-N Before the Year Ends!

E-file Form 990-N Before the Year Ends!

There are only two full months left within the year, and if your small tax-exempt organization needs to file a tax return, ExpressTaxExempt.com has you covered. It’s not too late to transmit your IRS Form 990-N (e-Postcard) before the end of the year!

IRS Form 990-N (e-Postcard)
The 990-N serves as an electronic notice and is for small organizations that make less than $50,000 - and that’s pretty much all you’re reporting to the IRS. There is no need for any exact amounts or schedules. The form is also electronic-only; you won’t find a paper version anywhere!

E-filing with ExpressTaxExempt.com
We make e-filing IRS Form 990-N (e-Postcard) as simple as 1-2-3! With our quick and easy steps, you can complete and transmit your form within minutes:

1. 1. Create a FREE account at ExpressTaxExempt.com
2. 2. Enter your Basic Organization Details
3. 3. Select the appropriate Tax Year
4. 4. Confirm your Gross Receipt
5. 5. Review Summary and Audit Report
6. 6. Authorize and Transmit to IRS

After submitting your 990-N, you’ll gain access to a printable copy of your e-Postcard summary and receive real-time email notification about your filing status. If the IRS rejects your e-file for any reason, we’ll identify the issue so you can make corrections and re-transmit at no extra cost!

IRS Penalties
There isn’t much of a penalty for filing Form 990-N (e-Postcard) late, which is why you still have until the end of the year to file. It doesn’t matter if your deadline was months ago - you’re still able to e-file.

There are consequences for not filing at all - fail to file for three consecutive years, and you’ll lose your tax-exempt status. You also can’t file an IRS Form 8868 extension form for e-Postcards. If you can’t file before the deadline, be sure to file as soon as possible afterward.

Important: The IRS e-filing system only supports three consecutive filing years at a time. As the new year begins, the oldest year gets dropped from support. These final two months will be the last time an organization can e-file for 2013. Your only option is to paper file IRS Form 990-EZ for any discontinued years.

Feel free to contact our U.S. - based, e-file professionals for valuable assistance or to answer questions about e-filing a 990 form. You can reach us at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or 24/7 day and night with support@ExpressTaxExempt.com.

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Don’t Get Revoked! Retain Your Tax-Exempt Status

For exempt organizations, the IRS requires that you file a tax return each year that reports your total revenue, total expenses, and activities. You submit these annual tax returns based on your gross receipts:

• IRS Form 990-N (e-Postcard) - For organizations with gross receipts less than $50,000
• IRS Form 990-EZ - For organizations with gross receipts between $50,000 and $200,000
• IRS Form 990 - For organizations with gross receipts greater than $200,000

Keep Your Exempt Status
The easiest way to maintain your organization’s tax-exempt status is to file your mandatory 990 form each and every year. Even if you miss the deadline, which may result in IRS penalties, you should still file the return as soon as possible.

Having tax-exempt status allows your donors to write off contributions from their tax return, and it also keeps the federal government from imposing taxes on the income your organization brings in - so it’s important to maintain your status.

Losing Tax Exemption
Failing to file your 990 returns for three consecutive years is the quickest way to lose your exemption status automatically. You can use the EO Select Check to see if the IRS automatically revoked your organization - it’ll list the exact date the revocation became effective.

There are also other ways your organization can lose its exemption status such as participating in political or lobbying activities, but failing to file three years straight is an automatic loss - no questions asked. Conversely, there are particular types of organizations that are naturally exempt - they aren’t required to file a 990 form.

Reclaim Your Exemption Status
If you lose your tax-exempt status, you’ll need to file the correct application for exemption based on your gross receipts and pay the processing fee. You may even be eligible to request reinstatement back to the revocation date.

After you’ve obtained your exemption status again, the IRS may ask you to file 990 forms for the years you’ve missed. With ExpressTaxExempt.com, you have our easy-to-use, cloud-based service to e-file the 990 series for the available tax years within the IRS e-filing system.

You can also keep your tax-exempt status up to date by e-filing with ExpressTaxExempt.com every year. Contact our helpful U.S. - based support team for any questions about the e-filing experience. We’re available at 704.839.2321 - business hours are Monday through Friday from 9 a.m. to 6 p.m. EST, or you can email us 24/7 with support@ExpressTaxExempt.com.

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5 Key Points for a Nonprofit Community Impact Statement

When sharing the latest and greatest accomplishments of your nonprofit or charitable group, it’s typical of exempt organizations to issue a Community Impact Statement to donors, potential volunteers, and community leaders.

Your statement can include many facts that clearly demonstrates your organization’s outreach within the community. Here are five key points from the nonprofit industry you should include in your impact statement.

Hours from Volunteers
An important aspect of quantifying your organization’s community outreach is the monitoring, gauging, and distribution of volunteer hours. There are online tools available for organizations to quickly schedule and mark volunteers along with real-time reports on service hours. You could even find smartphone apps to pass along to your volunteers, which can allow them to follow and report hours on their own.

Products or Services Offered
Whatever work or items your organization provides to the community - showcase it! Based on your type of nonprofit or charity, show just how many homes built, school supplies distributed, parks cleaned, meals cooked, etc. Quantified numbers always help give a clear picture of your organization's activities.

Funds Raised
Nothing probably showcases community impact better than the contributions, gifts, and grants that your nonprofit draws in. While it proves how your organization supports its activities, it also shows a glimpse of the faith and dependability of your organization’s donor base.

Service Value
According to statistics, the dollar amount for volunteer service is $23.56 per hour. And last year, the national value of service from volunteers was an estimated $184 billion! Converting the time, skill, and talent of your volunteers into a monetary value can show how the community is financially benefiting from your organization.

Testimonials
For nonprofits and charities, a story about the lives changed and the benefits of your organization can inspire others to give or get involved. Share interviews from volunteers or community residents that you've helped. You can also implement quotes and stories on your organization’s website or promotional materials.

Other than publishing a Community Impact Statement, exempt organizations are required by the IRS to share information from annual tax returns with the public. With ExpressTaxExempt.com, you have instant access to a PDF copy of your transmitted IRS Form 990/990-EZ. You can print as many copies as needed or upload the PDF file to your organization’s website.

If you have any questions or issues with e-filing your tax return with our services, please contact our U.S. - based, customer support team at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST. We’re also available via email with support@ExpressTaxExempt.com.

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Tax Tips for Nonprofit Volunteers

Volunteers are an indispensable aspect of any nonprofit organization or charity. They help complete the daily tasks required, which allows your organization to continue reaching its mission or goal.

Many of you may already have a process in place for recruiting volunteers - email blasts, social media, sign-up events, and others.

But the key to secure potential volunteers is transparency. From the start, let your prospects know what you’re aiming to achieve and how they can assist. Another way to entice is explaining the benefits of volunteering. One of the many incentives for people donating services are the tax deductions.

Here are a few tips and guidelines from the IRS about claiming credits from services to charity.

Qualified Organization
Before your volunteers can deduct any service costs, the nonprofit or charity must be officially recognized by the IRS as a Section 501(c)(3) exempt organization - this leads right back to being transparent with your potential helpers. You’re obligated to explain whether your nonprofit is officially tax-exempt, waiting on approval, or haven’t even registered. Church and government organizations are automatically qualified.

Out-of-Pocket Spending
Volunteers can deduct traveling costs necessary to donate their services. All costs must meet the following criteria for eligibility:

• Unreimbursed expenses
• Fees accrued due to given services
• No living, family, or personal expenses
• Costs directly related to donated services

Substantial & Authentic Work
Your volunteers must perform work that is “real and valuable” to the organization. Any travel expenses are ineligible for tax credits if the volunteer duties were minimal or have no impact or significant importance with your nonprofit or charity.

Value of Services & Time
According to the IRS, volunteers can’t deduct the value of their donated services - what this means is that they can’t claim what they would typically charge for a particular service. For example, let’s say a caterer volunteers to feed your fundraising event or gala - they’re ineligible to write-off the usual amount they would’ve charged to cater such an event; however, the cost of supplies, utilities, and travel for the event are approved deductions.

Claims on Travel Costs
Travel expenses that volunteers can deduct includes

• Car expenses
• Lodging costs
• Meal expenses
• Train, air, and bus transportation
• Other transportation costs needed for local travel

Check with your community’s tax professional or CPA about how you can further explain the tax incentives for nonprofit volunteers. And once you’ve got your volunteer situation complete, visit us at ExpressTaxExempt.com for all your federal e-filing needs.

With our services, you can e-file IRS Form 990-N (e-Postcard), 990-EZ, 990 (long), and Extension Form 8868 for an automatic, 3-month tax extension. Time is starting to wind down for those of you who extended your IRS deadline to November 15 - e-file right now with ExpressTaxExempt.com to avoid any late filing fees.

If you have any questions or need assistance with the e-filing process, our U.S. - based customer support is ready to help out. Call us at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST, or email us at your convenience with support@ExpressTaxExempt.com.

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ExpressTaxExempt - E-file Solutions for Exempt Organizations

No matter how you look at, running a successful nonprofit or charity organization isn’t an easy accomplishment. There are sufficient planning and organizing that goes into managing donor contributions, fundraising events, volunteers, community engagement, and a laundry list of other things designed to help reach the mission goal.

Not only that, but your organization and activities must be in compliance with the IRS to maintain exemption status. One of those regulations requires every tax-exempt organization to file a tax return each year. Here’s where the fine folks at ExpressTaxExempt.com step in to help!

With ExpressTaxExempt.com, you can transmit a complete, accurate, and secure tax return directly to the IRS quicker than paper filing. We offer various e-filing solutions for both small and large exempt organizations depending on your gross receipts.

IRS Form 990-N (e-Postcard)
For small organizations making less than $50,000 per year, you can e-file our quick and easy IRS Form 990-N (e-Postcard). In minutes, you can have your e-Postcard transmitted and approved by the IRS. You’ll only need your organization’s basic details, tax year period, and confirm the organization makes less than $50,000 - that is it, no exact amounts required.

E-file your Form 990-N (e-Postcard) for current and prior tax years starting at $9.90.

For even more convenience, download our FREE ExpressTaxExempt - Form 990-N mobile app! You can e-file for the current tax year from the palm of your hand with your iOS or Android smartphone or tablet.

IRS Form 990/990-EZ
If your organization is much larger, you’ll have to e-file either IRS Form 990 (long) or IRS Form 990-EZ. Nonprofits and charities with gross receipts over $200,000 will need the Form 990 (long), while organizations making between $50,000 and $200,000 will e-file Form 990-EZ. We also support Schedules for each form.

E-file Form 990-EZ for current and prior years starting at $129.99 or e-file Form 990 for the current and previous tax year starting at $299.95.

Need an amended return? ExpressTaxExempt.com currently supports amended returns for Form 990/990-EZ. You must have e-filed your original return with our services to successfully file an amendment.

Extension Form 8868
With everything else going on within your organization, there’s no question that you may need extra time to get all your tax information in order. With ExpressTaxExempt.com, you can also e-file IRS Form 8868 Part 1 & 2, which grants an automatic, 3-month extension or an additional, non-automatic, 3-month extension - totaling up to six months of extra time.

E-file your Extension Form 8868 for the current tax year starting at $14.95.

You don’t have to rush home to a desktop computer for a tax extension - download our FREE ExpressTaxExempt - Form 8868 mobile app for iOS or Android devices and quickly transmit your form on the go!

Important: With each of our forms, you’ll receive automatic email notifications when the IRS accepts your filing. If you get a rejected form, you’re able to make any corrections needed and re-transmit at no extra charge. We also use cloud-based technology so you won’t have to complete a filing in one sitting - exit whenever you want and continue right where you left off. And with our automated audit check, you can transmit an error-free form the first time around.

At ExpressTaxExempt.com, we’re here to help you comply with the IRS so you can get back to your organization and do the work that matters most. For any questions or assistance with the e-filing process, contact our U.S. - based customer support line at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST. Email us at your convenience with support@ExpressTaxExempt.com.

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Maintaining Tax-Exempt Status

Remember the holiday song “Santa Claus Is Coming To Town?” There’s a line there that goes, “He’s making a list, He’s checking it twice…” With exempt organizations, your list may not necessarily be about being naughty or nice - especially nonprofits or charities. You all are always on the nice list, right? But your organization should have some sort of checklist about sustaining your tax-exempt status that is verified on a regular basis.

We understand that running a successful nonprofit is hard work - and that’s just to make sure you’re achieving your mission goals and community objectives. The last thing you need is legal issues because you fell out of compliance with what the IRS, or your state, has in place. Here are some tips that can help maintain your exemption status:

• Prepare written receipts for contributions from individuals, and then register and file your annual reports that are required by your state. To make a tax deduction, a donor must have a written acknowledgement from your organization of any gift worth at least $250. You should also keep a record of the fair market value of goods and services provided by your organization. You can check your state’s official website for more information about state-specific requirements.

• Evaluate the compensation of top-tier members and contracts annually. If payment is excessively beyond industry guidelines, it could be viewed as a conflict towards your organization’s mission and ultimately lead to losing your exemption status. Any business arrangements should be formally approved, reasonable, and not in excess.

• Become familiar with the restrictions on lobbying activities. A substantial amount of lobbying can also cost you your tax-exempt status. Both the federal and state have restrictions and requirements for lobbying, which can include keeping a detailed record of such activities and expenses. For more information about lobby activities, check out one of our favorite blogs: Lobby Party.

• Pay taxes on unrelated business income, if necessary. Unrelated business income is from a regularly done service or activity that doesn’t necessarily work within your organization’s mission goal. Like lobbying, unrelated business income should be limited; if the unrelated business becomes the primary focus of your organization, you could lose your status. Take a look at our blog, Unrelated Business Income, for more information.

• Last, but certainly not least, file your required tax return to the IRS every year. Depending on your tax year, your filing deadline will always be on the 15th day of the 5th month after your tax end date. And depending on your gross receipts, you’ll either have to file the 990-N (e-Postcard), 990-EZ, or the 990 (Long).

Penalties for filing your tax return late can cost your nonprofit or charity thousands of dollars, and if you fail to file for three consecutive years, your organization loses its exemption status - no questions asked.

With ExpressTaxExempt, we support the exempt tax forms you need including the 990 series and Extension Form 8868. Our service offers impeccable features such as site encryption, McAfee secure certification, cloud computing, error checking, and interview-style questioning so you’re not just filling in a blank form on a screen.

And all of it is backed up by our live, tech-savvy support team in Rock Hill, South Carolina who is ready to assist you with the e-filing process. If you have questions about e-filing any of our available forms, dial us up at (704) 839-2321 Monday through Friday from 9 a.m. to 6 p.m. EST, or drop us a line anytime through our 24/7 email support at support@expresstaxexempt.com.

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