Tax-exempt organizations that fail to file Form 990 (including Form 990-EZ and Form 990-N) for three consecutive years will automatically lose their tax-exempt status.  The IRS announced today that it is providing one-time relief to small charities to file a delinquent Form 990-N or Form 990-EZ and retain their tax-exempt status even though they failed to file for three consecutive years.  This one-time relief is available for Form 990-N (e-Postcard) and Form 990-EZ filers only. 

Small organizations that are required to file Form 990-N (e-Postcard) and whose Form 990-Ns are due on or after May 17 and on or before October 15 can maintain their tax-exempt status by filing the delinquent Form 990-N by October 15, 2010.

Other small organizations who are eligible to file Form 990-EZ (but not the Form 990-N) can use a one-time voluntary compliance program (VCP) to come back into compliance. To be eligible to participate in the VCP, an organization must:

  • File complete and accurate paper Forms 990-EZ and/or Forms 990 for its current and two prior tax periods by the extended due date of October 15, 2010;
  • Submit a signed checklist agreeing to the terms of the VCP; and
  • Submit a check for the correct compliance fee.

The IRS website includes a list of organizations that may be in jeopardy of losing their exempt status.  For more information regarding this relief, please visit the IRS website by clicking here.