Washington, D.C.—GuideStar, the leading resource of nonprofit information, announced today that the IRS has published the first Automatic Revocation of Exemption List, thereby revoking the tax-exempt status of approximately 275,000 nonprofits and fundamentally changing the scope of the nonprofit industry. As the nation's premier source of nonprofit data, GuideStar is working to incorporate this information into its database and products.
"More than a quarter of a million nonprofits have had their tax exemptions revoked because they failed to file an annual return with the IRS in compliance with the Pension Protection Act of 2006," said Bob Ottenhoff, GuideStar's president and CEO. "This event will have a tremendous short-term impact on the nonprofit sector and those who support and rely on it. The true impact, however, will be long-term. Over time, knowing which organizations are in good standing with the IRS will increase public confidence in the sector as a whole, which in turn will increase support for the nonprofits it comprises."
The Pension Protection Act of 2006 requires the IRS to revoke the tax-exempt status of any organization required to file an annual return (Form 990, 990-N, 990-EZ, or 990-PF) that fails to do so for three consecutive years. Revocations are automatic and mandatory under the law. The Automatic Revocation of Exemption List published yesterday represents the first time this provision of the Pension Protection Act has been put into effect.
GuideStar is in the process of incorporating automatic revocation data and other information about nonprofits' standing with the IRS into the GuideStar database and GuideStar products.
"In a recent survey that GuideStar conducted with Hope Consulting, 87 percent of 5,000-plus donors said that nonprofit legitimacy is a key factor in their giving decisions," Ottenhoff stated. "GuideStar users and customers can continue to rely on the information we provide, knowing that it remains the most up-to-date and accurate nonprofit information available."
For more information on automatic revocations, see http://www2.guidestar.org/rxg/update-nonprofit-report/nonprofit-resource-center-automatic-revocation-of-tax-exempt-status.aspx. This page will be updated frequently as new information becomes available in the coming days.
GuideStar, www.guidestar.org, connects people and organizations with information on the programs and finances of more than 1.8 million IRS-recognized nonprofits. GuideStar serves a wide audience inside and outside the nonprofit sector, including individual donors, nonprofit leaders, grantmakers, government officials, academic researchers, and the media.