142: Someone Get Me a Flux Capacitor! | What Happens When Your Nonprofit IRS Status is Revoked

142: Someone Get Me a Flux Capacitor! | What Happens When Your Nonprofit IRS Status is Revoked

Author: Jess Birken, MNM, JD July 10, 2025 Duration: 18:52

Your nonprofit's 501(c)(3) status just got revoked – now what? Don't panic! Your organization still exists, but here's what you need to know.

It's Jess Birken here, and I'm back with co-host Meghan to tackle one of the most common (and scary-sounding) nonprofit disasters: losing your tax-exempt status.

Real Listener Question: "Our 501(c)(3) was revoked last year, and we have a community cleanup event coming up. Can we still do this event? Are we open to more liability?"

We're breaking down the biggest misconception about revoked tax status – your nonprofit doesn't disappear when you lose 501(c)(3) status! Plus, we're calling out "Uncle Larry" (you know, that volunteer who promised to handle your 990s for free) and explaining why delegation doesn't absolve board responsibility.

What You'll Learn:

  •   Why nonprofits lose tax-exempt status – the "three strikes" auto-revocation rule
  •            What revoked status actually means vs. what people think it means
  •            Whether you can continue operations and events without 501(c)(3) status
  •            The real liability risks (spoiler: probably not what you think)
  •            Why your insurance policies don't automatically change when status is revoked
  •            Board responsibility for compliance – delegation isn't abdication
  •            How to move forward without beating yourself up over past mistakes

Bottom line: Losing 501(c)(3) status is like changing your tax filing status from "married" to "single" – you still exist, you just need to get your label back. Remember: This happens to small nonprofits all the time. You're not alone, and it's fixable. Focus on moving forward, not beating yourself up.

Resources from this Episode

Connect with Us

Listen & Engage

Stay Connected


Ever find yourself wishing for a direct line to seasoned nonprofit leaders, a chance to unpack the real challenges that don’t make it into the glossy annual reports? Charity Therapy is that conversation. With host Jess Birken, who brings her background as a lawyer and a Master of Nonprofit Management to the table, each session feels like pulling up a chair with a trusted advisor. The discussions move beyond theory, tackling the granular details of operations that leaders actually face-whether it’s navigating a tricky IRS compliance question, rebuilding a fundraising strategy from the ground up, or managing the complex interpersonal dynamics that define any mission-driven team. This podcast digs into the operational heart of the sector, offering pragmatic insights you can apply directly to your own work. It’s a resource built on the understanding that running a nonprofit is a continuous practice of problem-solving, and Jess guides these explorations with clarity and a deep respect for the work. Tune in for honest dialogue that treats the daily grind of management as the serious and nuanced craft that it is.
Author: Language: English Episodes: 100

Charity Therapy
Podcast Episodes
101: The Tough Love Episode [not-audio_url] [/not-audio_url]

Duration: 16:14
We're back again with another episode and spilling the beans on a tricky, often overlooked concept - private benefit. You'll want to tune in as we break down what private benefit even IS, plus why it plays such a crucial…
100: A Twinkie for Your Brain [not-audio_url] [/not-audio_url]

Duration: 19:08
On this episode of Charity Therapy, Meghan and I dig deep into Founderitis, also known as Founder's Syndrome, in the world of nonprofits. As we answer a listener's question about balancing founder power and decision-maki…
099: Pump It Up! [not-audio_url] [/not-audio_url]

Duration: 16:33
On this episode of Charity Therapy, Meghan and I break down nonprofit bylaws and everyyyyything you didn't even know you needed to know. Trust me - by the end of this episode, you'll be a nonprofit legal eagle! From the…
098: Politics Are Weird [not-audio_url] [/not-audio_url]

Duration: 12:36
In this episode of Charity Therapy, Meghan and I are diving into the nitty-gritty of politics within the nonprofit world. Have you ever wondered if your nonprofit can hire someone running for local office? Well, a listen…
097: Girl Scouts & Vocabulary Lessons [not-audio_url] [/not-audio_url]

Duration: 20:09
In this episode of Charity Therapy, we're diving deep into the mysterious realm of nonprofit chapters and affiliates. If you've ever been perplexed by the nonprofit world's labyrinth of structures and systems, we've got…
096: This Ain't the Hobbit! [not-audio_url] [/not-audio_url]

Duration: 18:32
In this episode, we're tackling a BIG topic in the nonprofit world - how much should you do yourself vs hiring a professional? The nonprofit sector is FULL of DIYers, and sometimes that can get people into trouble. We've…
095: Meeting Skeletons [not-audio_url] [/not-audio_url]

Duration: 17:27
Hey there, nonprofit party people! In this episode of Charity Therapy, we're back again, diving headfirst into a topic that sounds about as thrilling as watching paint dry: meeting minutes. But stick with us! This episod…
094: The Anxiety Conga Line [not-audio_url] [/not-audio_url]

Duration: 20:38
In this episode of Charity Therapy, Meghan and I bravely step into the IRS maze. Don't worry - we've got a flashlight and a sense of humor to guide us through! We talk about the unexpected humanity we found within the wa…
093: Buses and Boats and RVs, Oh My! [not-audio_url] [/not-audio_url]

Duration: 23:51
Hi there, fellow nonprofit champions! In this episode of Charity Therapy, we're diving deep into the tangled world of strategic planning and how to lead a nonprofit team without losing your sanity. Our guest is Avi Olitz…
092: Red Flags & Lemonade Stands [not-audio_url] [/not-audio_url]

Duration: 18:06
Hey there! Welcome back to another exciting episode of Charity Therapy! We're diving into the complexities of moving a nonprofit organization this time. Yes, you heard that right - relocating an entire nonprofit. Sounds…