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Can a 501(c)(3) take a sabbatical as an organization to regroup?

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Can a 501(c)(3) take a sabbatical as an organization to regroup?

Can a 501(c)(3) take a sabbatical as an organization to regroup?

Yes. An organization can suspend its operations for a short period without losing its 501(c)(3) status.

Sunday, February 18, 2007

Comments

Can it take a year off? How long is a short period?

Submitted by:

Peggy Long

RESPONSE

Lawyers, and regulators, love to argue about what is a "reasonable" time. I certainly think a year would be reasonable in this type of situation, and it could be longer. The IRS is not seeking to deny exemption for organizations that haven't done anything wrong and would only have to reapply if they lost their status and then wanted to start up again.

The organization ought to be sure to continue to file a 990-N tax return. If it fails to file for three years, it will lose its exemption automatically without the IRS having to make a decision at all.

Submitted by:

Don Kramer

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