Notice 2011-43 Transitional Relief Under Internal Revenue Code Section 6033(j) for Small Organizations

regulations might also require the reporting and payment to occur on the same calendar date regardless of the “policy year”
or “plan year” of any individual issuer or
plan sponsor. Comments are invited on
this approach and possible alternatives.
Other Issues That Should be Addressed
in Guidance
.09 In addition to comments on the topics described above, comments are invited
on the following specific issues:
1.

2.

3.

What transition rules, if any, would
be appropriate for the first “policy
year” or first “plan year” ending after
September 30, 2012? For example,
would any of the information necessary to determine the average number
of lives covered be unavailable for
the first year for which the fee is in
effect?
Is guidance needed concerning the
definition of “policy year” or “plan
year” for purposes of §§ 4375 and
4376? If so, how should these terms
be defined?
Are there circumstances under which
an issuer or plan sponsor might not
know whether a covered individual
resides in the United States? If so,
how should those circumstances be
addressed? Is guidance needed on the
application of §§ 4375 and 4376 to
plans that cover expatriates?
Should future guidance permit all employers treated as a single employer
under § 414 to be treated as a single
employer for purposes of § 4376(b)?
If so, under what conditions?
In the case of the fee imposed on selfinsured health plans, what guidance
is needed concerning the ability of a
third-party administrator to act on behalf of a plan sponsor in complying
with the § 4376 fee requirements?

2.

3.

Electronically
to
Notice.Comments@irscounsel.treas.gov. Please
include “Notice 2011–35” in the subject line of any electronic communications.
By hand-delivery Monday through
Friday between the hours of 8 a.m.
and 4 p.m. to CC:PA:LPD:PR (Notice
2011–35), Courier’s Desk, Internal
Revenue Service, 1111 Constitution
Ave., NW, Washington, DC 20224.

DRAFTING INFORMATION
The principal author of this notice is
Rebecca L. Baxter of the Office of Associate Chief Counsel (Financial Institutions
& Products). For further information regarding this notice, contact Ms. Baxter at
(202) 622–7117 (not a toll-free call).

Transitional Relief Under
Internal Revenue Code
§ 6033(j) for Small
Organizations
Notice 2011–43

.10 Comments will be considered if
submitted in writing by September 6,
2011. All comments will be available for
public inspection and copying. Comments
may be submitted in one of three ways:

This notice provides transitional relief
for certain small organizations that have
lost their tax-exempt status because they
failed to file a required annual electronic
notice (Form 990–N e-Postcard) for taxable years beginning in 2007, 2008 and
2009. A small organization — that is, one
that normally has annual gross receipts of
not more than $50,000 in its most recently
completed taxable year — that qualifies
for the transitional relief under this notice
and applies for reinstatement of tax-exempt status by December 31, 2012, will
be treated by the Internal Revenue Service
(“IRS”) as having established reasonable
cause for its filing failures and its tax-exempt status will be reinstated retroactive to
the date it was automatically revoked.
Organizations not described in this notice should consult Notice 2011–44, in this
Bulletin, for guidance on how to apply for
reinstatement of tax-exempt status and request retroactive reinstatement.

1.

BACKGROUND

4.

5.

By mail to CC:PA:LPD:PR (Notice
2011–35), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben
Franklin Station, Washington, DC
20044.

2011–25 I.R.B.

(j) to the Internal Revenue Code (“Code”),
both of which became effective for taxable years beginning after 2006. Section
6033(i) requires tax-exempt organizations
excepted from filing annual information
returns because they normally have annual
gross receipts of not more than $25,000
(increased to normally not more than
$50,000 for taxable years beginning on or
after January 1, 2010) to annually file a
Form 990–N e-Postcard. Section 6033(j)
automatically revokes the tax-exempt status of any organization that fails to file
a required annual return or Form 990–N
e-Postcard for three consecutive years.
In order to obtain reinstatement of its
tax-exempt status, an organization that has
had its tax-exempt status automatically revoked under section 6033(j) must apply
for reinstatement with the IRS, even if it
was not originally required to submit such
an application. I.R.C. § 6033(j)(2). If
an organization applying for reinstatement
of tax-exempt status can show reasonable
cause for its consecutive filing failures, the
organization’s tax-exempt status may, in
the discretion of the Secretary, be reinstated retroactive to the date of the automatic revocation. I.R.C. § 6033(j)(3).
ELIGIBILITY FOR TRANSITIONAL
RELIEF
The IRS recognizes that many small
organizations that have lost their tax-exempt status because they failed to file a
Form 990–N e-Postcard for their 2007,
2008, and 2009 taxable years were never
required to file an annual return or notice
prior to their 2007 taxable year. The IRS
also recognizes that many small organizations are operated by volunteers and may
face unique challenges in meeting federal
tax obligations. Accordingly, the IRS will
treat a small organization (one that normally has annual gross receipts of not more
than $50,000 in its most recently completed taxable year) as having established
reasonable cause for failing to file a Form
990–N e-Postcard or an annual return for
its taxable years beginning in 2007, 2008,
and 2009 if it meets each of the following
criteria:

•

The Pension Protection Act of 2006,
Pub. L. No. 109–280, 120 Stat. 780,
§ 1223 (2006), added sections 6033(i) and

882

The organization was not required to
file annual information returns (such
as Form 990, Return of Organization Exempt from Income Tax or Form

June 20, 2011

•

•

990–EZ, Short Form Return of Organization Exempt from Income Tax) for
taxable years beginning before 2007.
The organization was eligible in each
of its taxable years beginning in 2007,
2008, and 2009 to file a Form 990–N
e-Postcard (rather than an annual information return). Generally organizations (other than private foundations
and most section 509(a)(3) supporting organizations) with annual gross
receipts that were normally not more
than $25,000 in such taxable years
would have been eligible to file a Form
990–N e-Postcard.
On or before December 31, 2012, the
organization submits to the IRS a properly completed and executed application for reinstatement of tax-exempt
status.

An organization’s annual gross receipts
are “normally not more than” $25,000 or
$50,000 in a taxable year if its average annual gross receipts for that taxable year
and the two taxable years immediately preceding it are not more than $25,000 or
$50,000, respectively. See Rev. Proc.
2011–15, 2011–3 I.R.B. 322, section 4.
The IRS will reinstate the tax-exempt
status of a small organization that meets
the above criteria retroactive to the date it
was revoked.
APPLICATION FOR REINSTATEMENT
OF TAX-EXEMPT STATUS
An organization seeking reinstatement of tax-exempt status under section
6033(j)(2) must use the same forms that
are filed by all other applicants for tax-exemption. Thus, an organization seeking
reinstatement of tax-exempt status under
section 501(c)(3) must submit Form 1023,
Application for Recognition of Exemption
Under Section 501(c)(3) of the Internal
Revenue Code. Most other organizations
seeking reinstatement of tax-exempt status must submit Form 1024, Application
for Recognition of Exemption Under Section 501(a). Any organization that seeks
reinstatement of tax-exempt status must
submit the appropriate application regardless of whether the organization was
originally required to apply with the IRS
for recognition of tax-exemption.
A small organization seeking the transitional relief described in this notice must

June 20, 2011

write “Notice 2011–43” on the top of the
form it uses to apply for reinstatement of
tax-exempt status and on the envelope.
A small organization seeking the transitional relief described in this notice must
also attach to its application for reinstatement of tax-exempt status the following
statement:
[Name of Organization] was not required to file annual information returns for taxable years beginning before
2007; was eligible in each of its taxable years beginning in 2007, 2008 and
2009 to file a Form 990–N e-Postcard;
and had annual gross receipts of normally not more than $25,000 in each
of its taxable years beginning in 2007,
2008 and 2009.
Small organizations that are eligible for
the transitional relief described in this notice are also eligible for a reduced user
fee of $100 for the application of reinstatement of tax-exempt status. See Rev.
Proc. 2011–36, this Bulletin, modifying
Rev. Proc. 2011–8, 2011–1 I.R.B. 237,
section 6.07. For information on where
to mail the application for reinstatement of
tax-exempt status, see the Instructions for
Form 1023 or Form 1024 (whichever is applicable).
SUBSEQUENT AUTOMATIC
REVOCATIONS
An organization whose tax-exempt status has been automatically revoked and reinstated may have its tax-exempt status automatically revoked a second time under
section 6033(j)(1) only if it fails to file returns or notices for another three consecutive taxable years, beginning with the taxable year the IRS approves its application
for reinstatement of tax-exempt status. For
example, if an organization reporting on
a calendar year basis has its tax-exempt
status automatically revoked for failing to
file required returns or notices for 2007,
2008, and 2009 and receives a determination letter recognizing the reinstatement of
its tax-exempt status dated September 1,
2011, the organization’s tax-exempt status
will not be automatically revoked a second
time for failing to timely file a return or notice for 2008, 2009, and 2010. However,
the organization’s tax-exempt status will
be automatically revoked a second time if
the organization fails to timely file a return
or notice for 2011, 2012, and 2013.

883

DRAFTING INFORMATION
The principal authors of this notice are Monice Rosenbaum and
Preston Quesenberry of the Office
of Division Counsel/Associate Chief
Counsel (Tax Exempt and Government
Entities) and Matthew Giuliano of the Tax
Exempt and Government Entities Division
of the IRS. However, other personnel
from the IRS and Treasury Department
participated in developing this notice.
For further information regarding this
notice, contact Ms. Rosenbaum at (202)
622–6070, Mr. Quesenberry at (202)
622–1124, or Mr. Giuliano at (202)
283–8917 (not toll-free numbers).

Application for Reinstatement
and Retroactive
Reinstatement for Reasonable
Cause Under Internal Revenue
Code § 6033(j)
Notice 2011–44
SECTION 1. PURPOSE
This notice provides guidance with
respect to applying for reinstatement
of tax-exempt status and requesting
retroactive reinstatement under sections
6033(j)(2) and (3) of the Internal Revenue
Code (“Code”) for an organization that has
had its tax-exempt status automatically
revoked under section 6033(j)(1) of the
Code. The Treasury Department (“Treasury”) and the Internal Revenue Service
(“IRS”) intend to issue regulations under
section 6033(j) that will prescribe rules
relating to the application for reinstatement of tax-exempt status under section
6033(j)(2) and the request for retroactive
reinstatement under section 6033(j)(3). To
assist in the drafting of these regulations,
Treasury and the IRS solicit comments on
the issues addressed in this notice.
In this Bulletin, the IRS has also published Notice 2011–43, which provides
transitional relief for certain small organizations (those that normally have annual
gross receipts of not more than $50,000
in their most recently completed taxable
year) that have lost their tax-exempt status
because they failed to file an annual electronic notice for taxable years beginning

2011–25 I.R.B.