Consultation on Reinstating Nonprofit Status in CA
Assist a nonprofit supporting scientists in conservation efforts by answering questions related to reinstating their nonprofit status with the California Franchise Tax Board (FTB).
Referred by:
Adventure Scientists is a nonprofit currently listed as ‘forfeited’ with the California Franchise Tax Board (FTB) due to an administrative oversight — a $38 fee was inadvertently omitted when submitting the CA 199 filing. This was filed on time, however the fee was missed due to the org not having made an account with the CA FTB Portal. They are seeking guidance on the best path forward.
The org was told to file (from the FTB) form 3500 to reinstate the org as a nonprofit in CA. The FTB has indicated that a review of their tax-exempt status reinstatement could take up to 10 months. They have five primary questions:
- Should they wait out the reinstatement review, and what are the legal and operational risks of remaining in ‘forfeited’ status during that period? They are currently active with the CA Office of the Attorney General.
- If they pay California taxes in the interim as a protective measure, could that be interpreted as an admission that they are not tax-exempt, and how would they pursue a refund upon reinstatement?
- Is there an expedited reinstatement process — such as filing a Certificate of Revivor — that might resolve this more quickly given that the forfeiture stems from a minor administrative error rather than a substantive compliance failure?
- Does this impact their ability to hire in CA and receive CA based donations? Are there any steps they can take to both hire and receive donations while they are waiting for reinstatement?
- Does this forfeiture affect their standing with the California Secretary of State and is there any risk to their federal 501(c)(3) status.
The Adventure Scientist team would also appreciate assistance with the reinstatement process (should legal assistance be necessary). However, this is a secondary request.