IRS revokes tax-exempt status from 5,000 nonprofits in state of Wisconsin

The Internal Revenue Service has released the list of 501c3 nonprofit organizations that have had their tax-exempt status revoked under section 6033 of the Internal Revenue Code.
The code automatically revokes the exemption status of any organization that fails to satisfy its tax filing requirement for three consecutive years.
Nationwide there are more than 275,000 nonprofits on the list and approximately 5,100 nonprofits in Wisconsin.
“The IRS has been in contact with nonprofit organizations since around 2006 when the pension protection act was passed and this tax filing requirement was included in the legislation,” said Mike VanWagenen partner  at Reilly, Penner & Benton, LLP. “The IRS did not receive any tax filings from organizations on the list for 2007, 2008 and 2009. Under the new provisions their tax exempt status was revoked.”
According to VanWagenen, the IRS has stated it is likely many of the nonprofit organizations on the list are no longer operating 501c3s, he said.
“I’m inclined to agree with the IRS in that many of these organizations probably do not exist anymore,” VanWagenen said.
Organizations on the list are no longer eligible to receive tax-deductible contributions, VanWagenen said.
Leigh Kunde, executive director of the Nonprofit Center of Milwaukee indicated she too would side with the IRS and say many of the organizations on the list are no longer operating.
Organizations that have received a revoked status notification can request reinstatement by filling out an extensive application form and in some cases paying a specified user fee, in some cases as high as $850, VanWagenen said.
“There isn’t a specific timeline for when organizations who want their exemption status reinstated, but if the organization is still accepting conributions from donors they will want to do it as soon as possible because the contributions are not tax deductible,” he said.
According to the IRS website, organizations may request that the reinstatement of their tax exempt status be applied retroactively to the date the status was revoked, but the IRS will do so under limited circumstances.
” Ultimately it’s up to the individual donor to make sure the contributions they are making are going to organizations that are in good standing with the IRS,” VanWagenen said. “The organizations who lost their tax-exempt status are no longer eligible to receive tax-deductible contributions and therefore are not listed in the current version of Publication 78 which lists all qualified organizations.”
Donors can rely on information published in Publication 78 when making tax-deductible contributions, VanWagenen said.
For a complete list of nonprofit organizations who have had their tax-exempt status revoked click here, or visit the IRS website for more information and correct forms to file for reinstatement.

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