Nonprofits’ exemption revoked
Editor’s Note: This story has been updated since the print version that appeared in the July 22, 2011 edition of The Shepherdstown Chronicle.
According to the Internal Revenue Service, approximately 13 nonprofits with Shepherdstown mailing addresses lost their tax exempt statuses between May and October 2010.
Failing to file required annual returns and notices for three consecutive years as laid out in the Pension Protection Act, passed by Congress in 2006, these organizations’ tax-exempt statuses were automatically revoked and posted publicly in June.
Upon further investigation, it was discovered that a few organizations were defunct while some would look into reinstating the status; others felt they could operate without it and one was in the process of reincorporating under another Employment Identification Number, or EIN, entirely.
When Shepherdstown Street Fest originated, it had incorporated itself, according to Vice President Chris Stroech, as a 501(c)4. When the event did not commence during the summer of 2010, Stroech said its corporate and tax exempt statuses “lapsed.”
The organization is currently working to reincorporate itself, which Stroech said will allow for retroactivity “back to the day of business” of the new corporation’s 501(c) and EIN numbers, meaning donations made this year will be covered. He said he is unaware of any donations made to Street Fest during the lapsed time.
Stroech expects this process to take about six months.
Daniel Vreugdenhil, president of Adopt a Ranger, said while his organization is still operating, he has had limited time to raise funds, ultimately deciding against filing the annual the paperwork, which normally comes with a large filing fee.
“For not raising any money, that’s a big loss,” Vreugdenhil said.
In a release issued by the IRS in early June, it stated that organizations with annual gross receipts of less than $50,000 or less for 2010 can regain their tax-exempt status for a reduced application fee. According to the IRS, original application fees are $400 or $850; nonprofits fitting this criteria can pay $100 to reinstate the status.
Vreugdenhil’s organization is more active on the Internet about raising awareness about world-wide issues in conservation and lack of field staff.
“We have a very active digital presence, (and) we are very active as an advocate,” he said.
Vreugdenhil said he hopes to talk with his accountant to go about the proper channels to reinstate the organization’s tax exempt status.
Shepherd University’s Tau Kappa Epsilon fraternity also lost its tax exempt status.
In a statement released by Valerie Owens, executive director of University Communications, she said “Shepherd University is working with the Tau Kappa Epsilon National Office and the local chapter to file the necessary IRS nonprofit paperwork. The loss of nonprofit status will not prevent TKE from remaining a recognized organization on campus.”
But other organizations on the list said they simply do not need the status.
Phil Adams, treasurer of the Brothers of Harmony Masonic Lodge No. 42, said while the organization pays the $25 state fee to keep its tax exempt status in West Virginia, the organization holds smaller fundraisers a few times a year. He said members use the status when purchasing food for dinners for fundraisers, so the status is not used much.
Joseph Snyder, former editor of the newsletter for the American Association to Advance the Study of Pictographs and Petroglyphs, said the group is “fundamentally inactive at the moment.”
“I really can’t tell you what our future prospects are,” he said.
He also said he never received notices from the IRS, though the organization’s mailing address was changed from the Shepherdstown location.
A national organization formed in 1979, Snyder said legally the group is still in existence and functions primarily as an information-sharing group. He said the group has no plans to reinstate the tax-exempt status.
According to the IRS, the listing of these organizations should have “little, if any, impact on donors who previously made deductible contributions to auto-revoked organizations.” But, if the nonprofit does not reinstate the status, they are no longer eligible to receive tax-deductible donations and any income they receive may be taxable.
Calls were made to other organizations on the list the National Institute for Urban Wildlife and the Grief Support Network; however, those numbers were no longer in service. Attempts were also made to contact the St. Agnes Knights of Columbus Council; however, emails were not immediately returned regarding the inquiry.
Organizations looking to reinstate their tax-exempt status may visit www.IRS.gov.