Form 1120 After Revocation of Tax Exempt Status
Organizations did not file Form 990EZ file for three consecutive years and automatically lost their tax-exempt status. The organization has chosen NOT to seek reinstatement. I understand that an organization would need to fill out a Form 1120 (https://www.irs.gov/charities-non-profits/automatic-revocation-of-exemption) as a corporation and notify the IRS of intent to terminate their EO entity (https://www.irs.gov/charities-non-profits/termination-of-an-exempt-organization#orgs-did-not-file). My biggest question lies in this scenario: a) If the organization files Form 1120 and pay taxes as a corporation, would they have any obligation at that point to distribute cash assets that were acquired before the tax-exempt revocation, and b) Would the organization pay taxes on all assets or only revenue on earnings after the revocation for the tax year? I would sincerely appreciate any guidance or resources that you may be willing to provide. Thank you for your time.
