The IRS revoked the Haines Chamber of Commerce’s tax exempt status in May 2020 because it failed to file its tax returns for at least a three-year period. The revocation is an automatic IRS process and the chamber is currently reconciling the issue. The last time taxes were filed was in tax year 2016, according to IRS documents.
Because they’re attempting to correct the lapse within 15 months of the revocation, the chamber is eligible for a streamlined reinstatement process and will avoid any penalties, said chamber president Wendell Harren. They’ve hired an accountant to begin reinstatement. “This process is retroactive and will lead to no significant adverse impacts for our organization or members,” he said.
He declined to say how the lapse occurred.
Mike Walsh, vice president of the Foraker Group, an Alaska nonprofit advocacy organization, said it’s not uncommon for nonprofits to make the mistake.
“It’s not a terribly infrequent thing. The only real impact is that the organization could be liable for having to pay taxes on its revenue just like any regular corporation once they no longer have that tax exempt status,” he said. “That wouldn’t be the case if it’s reinstated retroactively.”