IRS notices for nonprofits: what they mean and how to respond

An envelope from the IRS can send a volunteer board into a panic. Most notices to exempt organizations fall into a handful of types, each with a clear next step. What matters most is reading the notice carefully, answering by its deadline and keeping proof of what you sent.

How to read a notice

Every IRS notice has the same key details at the top, usually in the upper right corner:

• Notice number, such as CP259A or CP141L. Search "Understanding your [number] notice" on IRS.gov for the IRS's plain-language explanation.
• Notice date, from which response deadlines are counted.
• Tax year or period and form number the notice is about.
• Employer identification number (EIN). Confirm it is yours; organizations with similar names do get each other's mail.
• Amount due, if any, and the date to pay or respond.
• Contact information: the phone number, fax number and address for responding to that notice.

Use the address, fax and phone number printed on your notice. They differ by notice type and IRS office.

The common notices

Return-not-filed notices (CP259A, B and D)

The IRS sends a CP259-series notice when its records show a required return wasn't filed. The IRS's own guidance on these notices says:

• If you filed within the last four weeks under the same name and EIN, you don't need to do anything. The return may not have been processed yet.
• If you filed more than four weeks ago, or under a different name or EIN, complete the response form in the notice and send it with a signed and dated copy of the return.
• If you haven't filed, file now, e-filing where required, and send the response form as the notice directs.
• If you don't think you had to file (for example, the organization was dissolved, or is a church not required to file), complete the response form and explain.

Ignoring a CP259A is the wrong move. Three consecutive years without a filed return means automatic revocation, notice or no notice.

Penalty notices (CP141L, CP141I, CP141C)

These notices charge the penalty under section 6652(c) for a late or incomplete Form 990, 990-EZ or 990-PF. For returns required to be filed in 2026, the penalty is $25 a day, up to the lesser of $13,000 or 5% of gross receipts, or $130 a day up to $65,000 for organizations with gross receipts over $1,309,500. See late-filing penalties for other years.

You have three choices:

1. Pay by the date on the notice to stop interest.
2. Request removal for reasonable cause with a signed written explanation sent to the address on the notice.
3. Show the penalty is wrong, for example with proof of a timely Form 8868 or e-file acceptance.

For a CP141I or CP141C, send the missing information too. The sample IRS notices show the kinds of gaps that trigger them, such as a missing Schedule B or filing a 990-EZ when the full 990 was required.

Revocation notice (CP120A)

A CP120A means the organization's exemption was automatically revoked for not filing for three consecutive years. Filing old returns won't undo it. The organization may need to file income tax returns (Form 1120 or 1041) and must apply for reinstatement. If you have proof that you did file, or an IRS letter saying you weren't required to, the IRS's guidance says to call or send it in. See automatic revocation and late filing and reinstatement.

Deadlines

Respond by the date printed on the notice. The sample penalty notice gives 30 days from the notice date to pay before interest accrues, but don't assume; check yours. If you can't gather everything in time, call the number on the notice before the deadline, explain and note the name of the person you spoke with, the date and what was agreed.

Writing a reasonable cause statement

The IRS will remove the penalty if the organization shows the failure was due to reasonable cause. A good statement:

• is signed by an officer and identifies the organization, EIN, form and tax year;
• explains what happened, with dates, and why it prevented timely filing;
• shows the organization acted responsibly and filed as soon as it could;
• describes what has changed so it won't happen again;
• attaches documentation: medical records, disaster declarations, correspondence.

Serious illness or death of the responsible person, natural disasters and loss of records are the strongest grounds. Forgetting, or relying on someone else who didn't file, usually isn't enough. Catching up on late returns walks through the process.

Calling the IRS

The IRS exempt organizations customer account services line is 877-829-5500, toll-free, Monday through Friday. Have the notice, the EIN and a copy of the return in front of you. The IRS will generally discuss the account only with an authorized person: an officer of the organization, or a representative with a power of attorney.

Form 2848 and Form 8821

• Form 2848, Power of Attorney and Declaration of Representative, authorizes an individual eligible to practice before the IRS, such as an attorney, CPA or enrolled agent, to represent the organization. For a corporation or association, an officer with authority to bind it must sign and give their exact title.
• Form 8821, Tax Information Authorization, lets a person or firm see and receive your tax information without representing you.

Either can be submitted online at IRS.gov/Submit2848 (a Secure Access account is needed) or by fax or mail as the instructions direct.

Keep a paper trail

• Keep the notice and envelope, and a copy of everything you send.
• Use a trackable method for mail, keep fax confirmations, and save e-file acceptance records.
• Log every call: date, the IRS employee's name or ID number, and what was said.
• Store all of it with the organization's records, not in one volunteer's inbox.

Make sure notices reach you: if you've moved, tell the IRS. See changing your name, address or fiscal year.

990IRS.com is a private company, not the IRS. This page is general information, not legal or tax advice for your organization. Example organizations and figures are hypothetical.