Most tax-exempt organizations are required to file an annual return or notice, a requirement that is important to people claiming a tax deduction for charitable giving. The IRS automatically revokes the exemption of any organization that fails to satisfy its filing requirement for three consecutive years. The automatic revocation is effective as of the due date of the third required annual filing.

Once an organization has had its exemption revoked, donors can no longer claim a tax deduction for charitable contributions to that organization. On June 10, 2011, the IRS updated Publication 78, Cumulative List of Organizations described in Section 170(c) of the Internal Revenue Code of 1986, and the IRS Business Master File (BMF) extract to remove approximately 275,000 organizations that have lost their exempt status prior to June 8, 2011.

The IRS also publishes the organization’s name on the IRS Auto-Revocation List to notify donors and others that the organization is no longer eligible to receive tax-deductible contributions. Once an organization appears on the Auto-Revocation List, donors may no longer rely on Publication 78 or the BMF extract for purposes of claiming tax-deductible contributions.