Should Your Nonprofit Social Club File for Tax-Exempt Status or Just Self-Declare?
Much like Michael Scott declaring bankruptcy by just shouting it out loud (spoiler: that’s not how it works), your social club can declare its federal tax-exempt status just like that (kind of). This is not legal advice, so please don’t just yell “I declare tax exemption!” in your board meeting.
Avoiding Automatic Revocation, and the Reinstatement Process
For nonprofit organizations, maintaining tax-exempt status isn’t just important—it’s their lifeline. Losing tax exemption can jeopardize their very existence, cutting off access to critical donor support, imposing new tax burdens, and undermining their ability to carry out their mission. The most common cause? Failing to file IRS Form 990 for three consecutive years leads to automatic revocation of tax-exempt status.
