What Happens to Your Tax Deduction if a Charity Loses Its Tax-Exempt Status?

Many Americans donate to charities they wish to support. If donors itemize deductions, they may also enjoy a tax break. But if a nonprofit violates tax laws or regulations, the IRS may revoke its tax-exempt status and remove it from the list of charities qualified to receive tax-deductible contributions. Suppose you’ve donated to a qualified charity that subsequently loses its tax-exempt status. Can you still deduct your donations? The IRS says donations made before the effective revocation date are tax-deductible. Future gifts, however, won’t be deductible unless the nonprofit regains tax-exempt status. Contact us with questions.