One of the most common questions nonprofit founders ask is whether their 501(c)(3) tax-exempt status needs to be renewed or if it is a one-time approval. The short answer is: Once approved, your 501(c)(3) status does not need to be renewed—but it can be revoked if you don’t stay compliant.
501(c)(3) Status Is Permanent—If You Stay Compliant
Once the IRS grants 501(c)(3) tax-exempt status, it remains in effect indefinitely. However, nonprofits must meet ongoing compliance requirements to maintain their tax-exempt benefits.
How Can a Nonprofit Lose Its 501(c)(3) Status?
If a nonprofit fails to follow IRS and state regulations, it can lose its tax-exempt status. The most common reasons include:
Failing to File a Form 990 – Nonprofits must file an annual Form 990 (990-N, 990-EZ, or 990 full). If a nonprofit fails to file for three consecutive years, the IRS automatically revokes its 501(c)(3) status.
Engaging in Prohibited Activities – If a nonprofit profits private individuals, engages in substantial lobbying, or participates in political campaigns, the IRS may revoke its status.
Operating Outside Its Mission – Nonprofits must continue to serve their stated charitable purpose. Shifting focus without updating organizational documents can lead to scrutiny.
How to Keep Your 501(c)(3) Status Active
File Form 990 Annually – This is the key compliance requirement for all nonprofits, even small ones.
Follow IRS and State Rules – Maintain accurate records and stay in good standing with state agencies.
Operate Within Your Mission – Ensure activities align with your approved charitable purpose.
What If Our 501(c)(3) Status Gets Revoked?
If your nonprofit loses its tax-exempt status due to missed filings or other violations, you must:
Reapply for 501(c)(3) Status – Submit IRS Form 1023 or 1023-EZ and pay the application fee.
Catch Up on Compliance – File missing Form 990s or address the issue that led to revocation.
Work with Experts – InstantNonprofit can help guide you through the reinstatement process.
Final Thoughts
Your 501(c)(3) status is permanent, but only if you stay compliant. Keep up with annual filings and follow nonprofit regulations to avoid revocation. If you need help keeping your nonprofit in good standing, InstantNonprofit is here to assist!