Poof! The IRS Revokes Tax Exemption for 20,000+ Arts Groups (Updated!)
In 2006, Congress asked the IRS to keep better track of the nation’s 1.7 million nonprofit organizations. Yesterday, the IRS revoked the tax-exempt status of 279,599 of them for not filing legally required documents for three consecutive years (2007-2009). Nearly 27,000 of them are nonprofit ARTS organizations.
The 26,875 arts groups represent 20 percent of all arts nonprofits—the largest percentage decrease among any of the charities. By contrast, only seven percent of religion-related organizations lost their exemptions. Cuts were noted in all arts categories, including 304 symphony orchestras, 702 museums, 395 arts councils, 2,533 theaters, 254 arts alliance/advocacy organizations, and 664 choirs.
Wondering who in your city got scraped from the rolls? Click here to download a full list of the nonprofit arts organizations, including address, EIN, and year established---organized by city and state.
The IRS believes that the vast majority of these organizations are out of business; our random sampling of the list found the same. When you review the list, you will find some of these don’t really look like arts organizations. The IRS assigns every nonprofit organization an NTEE Code to describe its type (A52=Children’s Museums, for example). Sometimes organizations are miscoded.
Do you see an organization that does not belong on this list? The IRS has an appeals process as well as a way to apply for reinstatement of their tax-exempt status, including retroactive reinstatement. (Details available at Notice 2011-43, Notice 2011-44 and Revenue Procedure 2011-36.)
A couple of notes . . .
- Your past tax deductible contributions to these organizations are safe; future contributions, however, may not be.
- We don’t know when these folks stopped operating—everyone has the same effective date of revocation—so we can’t assign any single policy or economic cycle to their closure.
- I write “Poof!” in the title, but I'll give the IRS major props for a genuine effort to connect with these organizations—extending deadlines and conducting extensive outreach efforts.
- Any surprises in your community’s list?
*This post was updated with new information on June 10, 2011, after initial publication on June 9.