IRS Revocation of Tax Exempt Status

The IRS can revoke a nonprofit organization's tax-exempt status if it fails to comply with federal tax laws. This may occur if the organization engages in prohibited activities, such as political campaigning, or if it does not meet the requirements for maintaining tax-exempt status, like failing to file annual reports. Losing this status means the organization must pay taxes on its income, which could significantly impact its operations and fundraising ability. Revocation is a serious matter, as it affects the organization's reputation and financial health.