December 17, 2020 — The Internal Revenue Service (IRS) notified Walla Walla University via letter that its nonprofit status has been reinstated retroactively. Per letter, dated November 19, 2020, and received by the university on December 17, 2020:
"We're pleased to tell you we determined you're exempt from federal income tax under Internal Revenue Code (IRC) Section 501(c)(3). Donors can deduct contributions they make to you under IRC Section 170. You're also qualified to receive tax deductible bequests, devises, transfers or gifts under section 2055, 2106, or 2522. This letter could help resolve questions on your exempt status. Please keep it for your records. Organizations exempt under IRC Section 501(c)(3) are further classified as either public charities or private foundations. We determined you're a public charity under IRC Section listed at the top of this letter. [Public charity status 170(b)(1)(A)(ii)] Based on the information you submitted with your application, we approved your request for reinstatement under Revenue Procedure 2014-11. Your effective date of exemption, as listed at the top of this letter, is retroactive to your date of revocation." [Nov. 15, 2019]
The retroactive reinstatement notice finalizes the university's request for expedited and retroactive reinstatement of its nonprofit charitable giving status after the IRS notified WWU that its nonprofit charitable status had been revoked due to technical errors in electronically filing its annual Return of Organization Exempt from Income Tax forms (otherwise known as Form 990s).
Retroactive nonprofit status ensures that any gifts submitted to and receipted by the university during the nonprofit status lapse will not be impacted.
How this happened
In the spirit of full compliance, every year WWU has completed Form 990 applications and electronically filed them with IRS, and we also post our Form 990s on the university’s web site for public viewing. However, IRS rejected WWU’s filings on the basis that the university’s Electronic Filing Identification Number (EFIN) was invalid.
WWU was not aware that IRS invalidated the university’s EFIN or did not accept our Form 990 applications. The university never received any physical notices of the EFIN or filing rejections until WWU received a September 14, 2020, letter of revocation. Thus, we were not aware that our nonprofit charitable giving status was in jeopardy.
Upon the revocation notification, the university immediately reviewed potential causes for the situation. In 2016 IRS unilaterally changed WWU’s tax year designation from June 30 (fiscal year) to December 31 (calendar year). Our review discovered that it is possible that in either moving the university to a calendar-year designation or, when WWU pointed out the error, back to our appropriate fiscal-year designation the IRS may have deleted the EFIN associated with WWU’s account since 2009. This would explain why Form 990s submitted from 2016 forward were rejected due to “EFIN error.”
Though IRS is required to notify WWU that its EFIN was invalidated, and to allow 60 days for university response, the university did not receive any IRS notice about an invalid EFIN and had no opportunity to correct the IRS error prior to revocation.
In response to the revocation notification, the university applied for expedited and retroactive reinstatement of its nonprofit charitable giving status, and began to notify donors of the situation via phone call or mail.
Donors who have concerns or questions may contact:
- Tammy McMann, gift manager, (509) 527-2095 or firstname.lastname@example.org
- Jodi Wagner, vice president for university relations and advancement, email@example.com
Thank you for your generous support of Walla Walla University!