In 2006, Congress amended Section 6033 to revoke the tax-exempt status of organizations required to file an annual Form 990, Form 990-PF, or Form 990-EZ, that fail to file for three consecutive years. The amended law also requires many organizations with less than $25,000 ($50,000 for tax years starting after January 1, 2010) in annual receipts to file annual informational reports (Form 990-N) —organizations that had never been required to file before.
The IRS recently began to formally revoke exempt status for those organizations that failed to comply. The IRS also issued guidance for organizations that have had their tax-exempt status revoked under the amended law in Notices 2011-43 and 2011-44. An organization whose exemption has been revoked should apply for reinstatement the same way it would apply for an exemption (by filing Form 1023 or Form 1024), even if it did not have to apply for its original exemption. The filing date will generally be the effective date of the reinstatement; retroactive reinstatement may be possible if the organization can show “reasonable cause” for its failure to file.
An organization that was not required to file before 2007 and that took in less than $25,000 a year in 2007, 2008, and 2009 can gain retroactive reinstatement simply by filing for reinstatement before December 31, 2012, and attesting to those facts in its application.