The Internal Revenue Service earlier this year announced that approximately 275,000 non-profit organizations had automatically lost their tax-exempt status because they did not file legally required annual reports for three consecutive years. The IRS also announced special steps to help any existing organizations to apply for reinstatement of their tax-exempt status.

As part of its effort to provide assistance to non-profit organizations, the IRS issued guidance on how such organizations can apply for reinstatement of their tax-exempt status, including retroactive reinstatement. In addition, the IRS announced transitional relief for certain small tax-exempt organizations – those with annual gross receipts of $50,000 or less for 2010 – that are subject to the new “postcard” Form 990 filing requirement. The relief allows eligible small organizations to regain their tax-exempt status retroactive to the date of revocation and pay a reduced application fee of $100 rather than the typical $400 or $850 fee. However, the window for taking advantage of these transitional relief provisions is limited, and organizations whose non-profit status has been revoked should move quickly to take advantage of them.