We recently discussed a new bill which would require the IRS to give nonprofit organizations more advanced notice before revoking their tax-exempt status. Sens. Dan Coats and Ben Cardin coordinated the “Notice for Organizations That Include Charities is Essential (NOTICE) Act,” which would require the IRS to notify charities within 300 days that it has not completed requirements to maintain tax-exempt status. Furthermore, the bill states that organizations can be reinstated without re-applying for tax-exempt status if they do not receive the advanced notice from the IRS.
While advanced notices may help some organizations that are unaware of the filing requirements, there are problems with revocation process that are not addressed in this bill. Rick Cohen, spokesman for the National Council of Nonprofits, brings up two of these possible issues. Some organizations relocate, and board members (along with officers) change periodically. If revocation notices “[are] going to the wrong addresses it doesn’t solve the issue,” Cohen says. Cohen also references the limitations the IRS is faced with due to low funding and resources. Cohen states that “The IRS is needed to perform an oversight role, process exempt status applications and Form 990s as they come in. [Congress] has cut and cut and cut, and what we need is Congress to step up and give the IRS the resources they need to do the job they have.”
For more information, check out this article by the NonProfit Times.