The reinstatement process does not have to be overly complicated. Reinstatement timelines are one of the most common questions from nonprofit leaders. The processing times, reinstatement options, and complexity of your organization all play a role in the IRS reinstatement timeline.
Average IRS Reinstatement Timeline
On average, the IRS takes 90 days to six months to process a reinstatement application. However, the exact timeline varies depending on which form your organization files:
- Form 1023-EZ (Streamlined Application): Typically processed within 90 days, this is the fastest route for small organizations with annual gross receipts under $50,000.
- Form 1023 (Standard Application): This more detailed form may take three to six months, especially for larger nonprofits or those requesting retroactive reinstatement.
- Form 1024 or 1024-A: Used by non-501(c)(3) organizations, these applications often follow similar timelines to the standard Form 1023.
Factors That Delay The Reinstatement Process
There are many reasons that can delay reinstatement, including:
- Incomplete applications or documentation.
- Inquiries from the IRS regarding additional information.
- High IRS volumes that lead to backlogged filings.
- Retroactive reinstatement requests. These involve reviewing past filings and reasonable cause statements.
Ways To Help The IRS Help You
To minimize delays, complete and accurate documentation should be submitted. Filing through Pay.gov is the quickest method and ensures all forms and statements are attached. Respond as fast as possible to requests from the IRS. Hiring a CPA or a nonprofit compliance expert can help in avoiding mistakes that, apart from delays, can be quite expensive.
Conclusion
In most cases, reinstatement with the IRS takes 3 to 6 months. Smaller organizations that file the Form 1023-EZ tend to be processed a lot quicker. In most cases, reinstatement with the IRS takes 3 to 6 months. Smaller organizations that file the Form 1023-EZ tend to be processed a lot quicker. With reinstatement, your organization can restore its tax-exempt status and continue its mission. With proper documentation, your organization does not need to be disrupted with tax-exempt status reinstatement. Dimov Tax presents expert aid to nonprofits. Contact us today for professional assistance.