An automatic purge by the IRS takes organizations off the books if they failed to complete their paperwork
The Compost Tea Industry Association is out. So is the Lane County Veterans Council and the Smiling Forehead Sufi Center.
These are among about 350 Lane County groups that lost their nonprofit status last month for failing to file a required report during the past three years, according to the Internal Revenue Service.
In Oregon, 3,700 charities lost their status. Nationally, 275,000 are off the books in an automatic purge. The revocation means the charities have to start paying taxes on the money they collect; and donors will no longer be able to claim a deduction on federal taxes when they give to the groups.
But the lion’s share of groups on the IRS’s list are ones that are defunct. In other cases, it’s not the organization itself but just a project or subsidiary that is no longer active. And some organizations are in the process of collapsing, or they’ve been operating under the radar — believing they are too small to make the IRS filings.
The Eugene compost tea organization, for instance, has been on life support for a couple of years. Three years ago, it was an august group with members from the academic, agricultural and manufacturing sectors.
Since then, it just kind of ran out of energy, said Michael Alms, who has been paying to keep the group’s website up so the name CompostTea.org would not be lost.
“It was a great thing. It’s just that everybody went away, and nobody wanted to support it anymore,” he said.
IRS officials said they have been generous with extensions and reminders for three years, doing their best to inform groups that the deadline for a new filing requirement was at hand.
Previously, nonprofit agencies that took in less than $25,000 weren’t required to file tax returns. Congress changed that law in 2006. Now, most nonprofits must file every three years or be automatically purged from the tax-exempt qualification rolls.
So it was a jolt to the United Way of Lane County when it learned this week that the agency was on the list of revoked agencies, Chris Pryor, the agency’s director of community impact said.
“We were stunned. Holy cow we lost our nonprofit status?” he said.
But it was an old United Way project organization that hasn’t been in use for years that lost its status.
“Our regular United Way of Lane County nonprofit status is absolutely intact, up to date, running just fine,” Pryor said.
The situation was similar for a Eugene YMCA listing.
“We moved all our money, probably 12 years ago. The Oregon Community Foundation manages all our endowment dollars,” Executive Director Dave Perez said.
The Jefferson Area Neighbors was on the list; but that group changed to the Jefferson Westside Neighbors more than a decade ago.
Springfield Filbert Festival is a distant memory. It had put on a summer festival for 17 years but had “run its course,” Sid Leiken said in 2006, when it went kaput.
The Friends of KRVM is alive and well, but it never did become an agency that was exempt from federal taxes, board president Bobbie Cirel said.
The paperwork was extensive and the cost to file was prohibitive for the small organization. “We’re pretty small potatoes in the world of potatoes,” she said.
Friends of KRVM is not to be confused with the KRVM radio station, which holds regular pledge drives and is a fully enrolled, not-for-profit organization.
The “friends” group mostly provides volunteers for the pledge drives, the Eugene Celebration and Earth Day information booths, Cirel said.
University of Oregon-based fraternities and sororities were on the revoked list, including Zeta Phi Beta Sorority, Alpha Kappa Alpha Sorority and Sigma Pi Fraternity International.
“Most of our organizations are based on donations,” said Annie Carlson, fraternity and sorority adviser at the university.
The local pledge groups belong to 250 national organizations. Some get millions in donations and others get little, Carlson said. She said student fraternity and sorority leaders don’t have to worry too much about the recent IRS action.
“I don’t think it will affect them on the local level too much. It’s really a national organization issue. Hopefully they’ll get it resolved,” she said.
Organizations can file for reinstatement of their tax-exempt status. The application fee is $200 to $850, according to the IRS. The IRS said it may offer a fee reduction to groups with annual donations of $50,000 or less.
Posts
No comments:
Post a Comment