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Nonprofit Law/Automatic Revocation of NP Status/ Application for Reinstatement vs. Dissolution

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Question
Posed the ? on search and came to a similar response you gave in 2007.  We are deep into the process of applying for reinstatement.  Some members say, "Let's just dissolve and start under another name."  IRS advised that we need to file 1120's for the years we were non-exempt. Would we still have to file 1120's for the non-exempt years if we dissolved? My thinking is you just can't walk away and think you can reapply when nothing but the name is changing  Thank you.

Answer
You wrote, "IRS advised that we need to file 1120's for the years we were non-exempt".  Are you referring to a specific communication from the IRS which indicated that they knew, at that time your organizations's name or was it simply a response to a general question about such organizations that had their status automatically revoked? After you give me that information I will reply further.

But I will inform you that late filing of the Form 1120s involves not only the possibility of having income taxes due for those years, but substantial penalties for later filing (plus interest).

If your organization dissolves under state law that does change the tax liability of the organization with the IRS for previous periods.

In any future application of a different entity the Form 1023 has questions on "Schedule G. Successors to Other Organizations"
http://www.irs.gov/pub/irs-pdf/f1023.pdf (pdf page 27).  That would certainly wake up the IRS to the previous organization's tax liabilities.

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic

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I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at Harvey108@hotmail.com I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.

Education/Credentials

B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.


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