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October 23, 2020; Accounting Today

Last week, we informed you that the Internal Revenue Service had issued automatic revocation notices to more than 30,000 tax-exempt organizations for failure to file a Form 990 report for three years in a row—well over what they expected to see. But all that has been walked back after the US House Ways and Means Committee expressed concern and some skepticism about the validity of the action by letter. They looked at the numbers, saw something sketchy, and then concluded one or two things may have gone wrong in the process, including that they had probably somehow ignored their own revised schedule for reporting. A day later, the IRS made an admission that the lawmakers had a point.

“Due to systemic limitations, we were unable to update this deadline in the program that automatically issues notices of revocation. This caused some revocation notices to be issued prematurely,” said the IRS. “Nevertheless, the IRS prevented eligible organizations that attempted to file electronically by July 15 from being listed as automatically revoked on, where they are still shown as tax-exempt. At the same time, we are processing paper filings which allow the reversal of auto-revocation for those filers. The IRS is reviewing the cases and corresponding with organizations that received the premature notice. Additionally, we have dedicated fax number, (855) 247-6123, to receive correspondence from organizations in this situation that wish to present documentation of their applicable filings.”—Ruth McCambridge