Tax exemption is not a status an organization obtains. It is a status an organization maintains, and it is lost on a schedule. The filings below are unglamorous, individually simple, and collectively the reason several thousand organizations lose their exemption every year without anyone intending it.
The Federal Return
Most exempt organizations file an annual return in the Form 990 series, due the 15th day of the fifth month after the close of the accounting period. For a calendar-year organization that is May 15. Churches and certain church-affiliated organizations are excepted under section 6033(a)(3) of the Internal Revenue Code, an exception narrower than many boards assume.
Which form depends on size. Organizations with gross receipts normally at or below $50,000 file the Form 990-N e-Postcard. Those below $200,000 in gross receipts and $500,000 in total assets may file Form 990-EZ. At or above those figures, the full Form 990 applies.
Form 8868 buys an automatic six-month extension, but only if filed before the original due date, and it does not apply to the 990-N. Small organizations therefore have the least paperwork and the least margin.
The Three-Year Clock
This is the one that ends organizations. Under section 6033(j), an organization that fails to file a required annual return or notice for three consecutive years loses its exemption automatically, effective on the original filing due date of the third missed return. The revocation happens by operation of law. There is no warning letter and no administrative appeal.
The consequences arrive together. The organization becomes taxable and must begin filing Form 1120 or Form 1041. Contributions stop being deductible. The name appears on the IRS Auto-Revocation List, which is published monthly and permanently searchable by every grantor and donor who looks. Reinstatement requires a fresh exemption application.
Note what triggers this. Three missed e-Postcards, each of which takes minutes, produces the same result as three missed Form 990s.
The Florida Annual Report
Every Florida nonprofit corporation files an annual report with the Division of Corporations, due May 1.
Here is where nonprofits get comfortable. The $400 late penalty that terrifies for-profit filers does not apply to nonprofit corporations, so May 1 arrives and passes without financial consequence, and the filing slides. What does apply is administrative dissolution. An entity that has not filed by the third Friday in September is administratively dissolved or revoked at the close of business on the fourth Friday. A dissolved corporation cannot sue in Florida courts, and reinstatement requires an application plus all accumulated fees.
Two May deadlines, one week apart, neither of which generates a bill for missing it. That combination is why this month deserves a calendar entry rather than a good intention.
Registration to Solicit
Separate from all of the above, an organization that solicits contributions in or from Florida must register with the Department of Agriculture and Consumer Services before soliciting, and file a renewal statement annually thereafter. § 496.405(1), Fla. Stat. Exemptions exist under section 496.406, including for certain small organizations using only unpaid volunteers.
The scheduling trap is that renewal runs on the anniversary of the department’s approval of the initial registration, not the fiscal year end. § 496.405(1)(a). An organization that has aligned every other obligation to its accounting calendar will find this one falling somewhere else entirely, and a lapse means the organization cannot lawfully solicit, which for a donation-dependent charity is not a paperwork problem.
Unrelated Business Income
An organization with $1,000 or more of gross unrelated business taxable income files Form 990-T. Advertising revenue, some sponsorship arrangements, and income from debt-financed property are the usual sources, and the line between related and unrelated income is misread often enough that it deserves an annual look rather than an assumption carried forward.
What Has No Deadline but Still Matters
The Form 990 asks whether the organization has a written conflict of interest policy, whether it is monitored and enforced, and whether the board reviewed the return before filing. Nothing forces an organization to do those things on a date certain. The return simply records the answer, under penalty of perjury, every year, in a document the public reads.
Most of the annual cycle above is not difficult. It is only relentless, and in most organizations no single person owns it.