The US government has begun revoking the tax-exempt status of non-profit organisations that have not filed their annual returns for the last three years.

The US branch of GuideStar estimates that as many as 300,000 organisations may lose their tax-exempt status, meaning that the sector may shrink by up to 25 per cent.

GuideStar has published a report examining what happens to a charity that loses its exemption, what will happen if a trust or foundation, or an individual donor, makes a grant to a non-profit that has lost its exemption, and how to find out whether the Inland Revenue Service has revoked a charity’s exemption.

Download the free report here.