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CP120A notice: what it means and what to do

Got an IRS CP120A notice? Here is what it means, your deadline, what to check before you answer, and how to reply. Check your own letter free: it stays on your phone.

Check my CP120A notice free

What the IRS says this notice is about

Your organization's tax-exempt status has been revoked for failure to file a Form 990 series return for three consecutive years. In addition, you are no longer eligible to sponsor a tax-sheltered annuity plan (Internal Revenue Code section 403(b) retirement plan).

What you need to do

File any appropriate federal tax return such as: Form 1120, U.S. Corporate Income Tax Return PDF , or
Form 1041, U.S. Income Tax Return for Estates and Trusts PDF
Review the instructions for these forms to determine whether and when your organization needs to file.
Contact your state to determine how the revocation affects your state responsibilities and filing requirements.

Your deadline

Answer by the date printed on your notice. If there is no date, answer as soon as you can, and call the number on the notice if you need more time.

What to check before you answer

Is this letter really from the IRS?

The IRS writes first by mail. A real letter shows a notice or letter number, your name and part of your tax ID number. The IRS does not ask for payment by gift card, crypto or wire transfer. If in doubt, sign in to your IRS online account, where many notices are listed.

You may want to

Apply for tax-exempt status.
If you apply for tax-exempt status, you may request that your tax-exempt status be reinstated retroactive to the date your exempt status was revoked.
Review “ Automatic Revocation - How to Have Your Tax-Exempt Status Reinstated ” for reinstatement procedures.

Common questions

I have a letter from you saying I don't have to file annually. What can I do?

Call 877-829-5500 (a toll-free number), OR
Fax your documents to 855-204-6184 using either a fax machine or online fax service. Protect yourself when sending digital data by understanding the fax service’s privacy and security policies, OR
Mail your documents to: IRS ― TEGE P.O. Box 2508 Cincinnati, OH 45201

I have proof I met my filing requirements? What can I do?

Call 877-829-5500 (a toll-free number), OR
Fax your documents to 801-620-5555 using either a fax machine or online fax service. Protect yourself when sending digital data by understanding the fax service’s privacy and security policies, OR
Mail your documents to: Internal Revenue Service 1973 North Rulon White Blvd M/S 6552 Ogden, UT 84404

Are there any penalties for filing a Form 990 or Form 990-EZ late - or not filing it at all?

Yes. If an organization's annual gross receipts for the year are less than or equal to $1 million, the IRS can charge the organization a penalty of $20 for each day the return is late, not to exceed the lesser of $10,000 or 5% of the organization's gross receipts for the year. If an organization's annual gross receipts for the year exceed $1 million, the IRS can charge the organization a penalty of $100 for each day the return is late, not to exceed $50,000. The organization's tax-exemption is automatically revoked if it fails to file its return for three consecutive years.

Is there any way an organization that files a return late can be relieved of paying a penalty?

Yes. A penalty will not be imposed if the organization can demonstrate that its failure to file on time was due to reasonable cause. An organization that believes it has reasonable cause for failure to file should attach a cover letter to its return explaining the late filing.

We want to apply for tax-exempt status. How much is the user fee?

The user fee for an organization that files a Form 1023-EZ is $275; the user fee for Form 1023, Form 1024 or Form 1024-A is $600. For more information on user fees, see Revenue Procedure 2022-5 (updated annually).

Before I fill out the application for tax-exempt status and pay the user fee, how do I find out if my organization qualifies for tax-exempt status?

For information regarding the types of organizations that qualify for exemption from federal income tax, see Publication 557, Tax Exempt Status for Your Organization PDF .

How can I check on the status of my application for tax-exempt status?

To check on the status of your application, see Where's My Application?

If my organization is a business and doesn't qualify for tax-exempt status, what type of tax return should we file?

The organization likely will need to file Form 1120, U.S. Corporation Income Tax Return PDF , though it may be responsible for filing other tax returns. For information on business taxes and the appropriate returns to file with the IRS, see Publication 583, Starting a Business and Keeping Records PDF .

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IRS: Understanding your CP120A notice