Tax Law Blog: Reinstating Tax-Exempt Organizations

by Davis Brown Law Firm

Section 6033(j)(1) of the Internal Revenue Code automatically revokes the tax-exempt status of an organization for failure to file the required annual return (Form 990, Form 990-EZ, or Form 990-PF) for three consecutive years. Revenue Procedure 2014-11 provides four procedures for organizations to apply for reinstatement of their tax-exempt status that was automatically revoked. Three of the procedures allow for retroactive reinstatement. 

Streamlined Retroactive Reinstatement Procedure  

An organization that was eligible to file either Form 990-EZ or Form 990-N for each of the three consecutive years it failed to file, and that has not previously had its tax-exempt status automatically revoked may apply for reinstatement by submitting Form 1023 or 1024 within 15 months of the revocation letter with the appropriate user fee. The IRS advises writing “Revenue Procedure 2014-11, Streamlined Retroactive Reinstatement” at the top of the application to facilitate processing. Additionally, penalties will not be imposed for failing to file the Form 990-EZ if the organization properly files the Forms for the years it failed to file after receiving reinstatement. (If the organization was able to file Form 990-N, there is no requirement to retroactively file.) (See Section 4 of the Revenue Procedure.)

Retroactive Within 15 Months of Revocation

If an organization is not eligible under Section 4, it may apply for retroactive reinstatement under Section 5 by meeting the following requirements:  (1) filing Form 1023 or 1024 within 15 months from revocation, (2) including the appropriate user fee, (3) including a statement of "reasonable cause" explaining the failure to file for at least one of the three years it failed to file (See Section 8.01), (4) filing the missing annual returns (writing “Retroactive Reinstatement” at the top of the returns), and (5) including with the application a statement that the missing annual reports have been filed. Penalties will be waived if the organization meets the 5 requirements and is retroactively reinstated. (See Section 5.)

Retroactive Reinstatement More Than 15 Months After Revocation

An organization applying for reinstatement more than 15 months after revocation may receive retroactive reinstatement by following the same procedure in Section 5, but must include a statement of "reasonable cause" for all three years it failed to file (See Section 8.02). Again, penalties will be waived if the organization meets the 5 requirements and is granted retroactive reinstatement. (See Section 6)

Post-Mark Date Reinstatement 

Organizations unable to meet the above requirements can apply for reinstatement by Filing the application and user fee, but such reinstatement will be effective only from the postmark of the new application.

Reasonable Cause

To establish the reasonable cause required in Section 5 and 6, the organization must show it exercised “ordinary business care and prudence” in attempting to comply with reporting requirements, and must state what steps have been taken to avoid future failures. Ordinary business care could include good faith reliance on erroneous information from the IRS, a history of complying with reporting requirements, and/or attempting to prevent failure combined with acting promptly upon discovering the failure and implementing safeguards to ensure future compliance. Additionally an officer, director or other official of the organization must sign under penalty of perjury stating to the best of his/her knowledge the statements in the application for reinstatement are true and complete. (See Section 7.)

Effective Date

The Rev. Proc is effective for all applications for reinstatement submitted after January 2, 2014. If an organization was previously granted reinstatement from the postmark date and would have satisfied the Section 4 Streamlined Procedure, the organization will automatically be reinstated retroactively to the revocation date. Organizations reinstated effective from the postmark date that would have qualified for retroactive reinstatement under section 5 or 6 may reapply by submitting the application previously filed and a copy of the reinstatement letter by May 2, 2014 and complying with the other requirements of the applicable section. The user fee is waived in these circumstances.

If you are unsure of your organization's filing requirements, or want more information on reinstatement after a failure to file, the IRS website has a chart to determine your organization’s Form 990 filing requirements and also the full revenue procedure


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Davis Brown Law Firm | Attorney Advertising

Written by:

Davis Brown Law Firm

Davis Brown Law Firm on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.