501(c)(3) Revocation Help
Based on a 2006 law, the IRS automatically revokes the 501(c)(3) tax-exempt status of any nonprofit organization that fails to file IRS information tax returns (990-series returns) for three consecutive years.
Each member of Parent Booster USA must file its own IRS Form 990-series return* using its own EIN (employer identification number also known as a federal tax identification number).
What should your organization do if its 501(c)(3) tax exempt status is revoked?
Option 1. Incorporate and obtain a new EIN. One option is to create a new legal entity by incorporating your booster club and obtaining a new EIN for the new corporation. The new corporation can then obtain 501(c)(3) status under PBUSA’s group exemption. (If your organization is already incorporated you may create a new corporation and dissolve the old corporation.)
- Current members of PBUSA – may pay a $120 upgrade fee to cover PBUSA’s costs of incorporating a new organization and obtaining an EIN for it.
- New PBUSA members should join at the $495 “Get Legal” level.
Members must also pay the state filing fees to incorporate (and dissolve if needed) their organizations. State incorporation filing fees vary from around $8 - $170.
NOTE: According to the IRS, revoked organizations are not required to file the missed 990-series returns. However, the IRS does expect organizations to comply with filing requirements after revocation. This usually means an organization, once revoked, must file corporate 1120 returns from the date of revocation of tax-exemption until the date that the organization is dissolved or has its tax-exempt status reinstated.
Option 2. File IRS Form 1023. To apply to the IRS to reinstate the 501(c)(3) tax-exempt status of your current organization, you must file the complete IRS Form 1023. (You may not maintain or reinstate tax-exemption for the current organization under PBUSA's group exemption.) In addition to the time to complete Form 1023, the IRS filing fee for the form is $850 if your organization’s gross income is $10,000 or more per year; if your gross income averages less than $10,000/year the IRS filing fee is $400.
NOTE: Under a new IRS new streamlined retroactive reinstatement process, organizations are not required to submit the missed IRS Form 990Ns or 990EZs with their reinstatement application. The streamlined process only applies to smaller organizations that qualified to file IRS Form 990N or 990EZ and file for reinstatement within 15 months of the later of their date of revocation or the date the IRS posted their revocation. Larger organizations that failed to file IRS full Form 990 must include the missed returns with their reinstatement Form 1023 application to apply for retroactive reinstatement to the date of the revocation. See IRS Revenue Procedure 2014-11.
More about form 990. IRS Form 990-series returns are due the 15th day of the 5th month following the close of an organization’s fiscal year. One significant benefit of membership in Parent Booster USA is that PBUSA sends several reminders, including at the end of each member’s fiscal year and again in the month the member’s 990 is due. See also IRS Form 990 Help on this website.
It is critically important that members update their contact information so that they receive these and other important notices from PBUSA.
* PBUSA membership as Get Legal, Stay Legal renewal, or Associate Stay Legal includes filing of the IRS Form 990N (e-postcard). An additional fee applies for filing a 990EZ or Full 990. Basic, Basic Renewal and Associate Basic members must file their own 990 return.