Tuesday, July 27, 2010
WALLA WALLA -- Despite a full-on media campaign and old-fashioned nagging from the Internal Revenue Service, nonprofit agencies across the nation continue to be at risk of losing tax-exempt status.
In Washington state alone, more that 8,000 charities have failed to file the paperwork required by the government to stay in business.
Thirty-eight of those groups are in Walla Walla County.
This is the first year charities with gross receipts under $25,000 have had to file with the IRS. The form, which in many cases is a simple as filling out a postcard, asks for a mission statement and data on staffing and how contributions are being used. Once done, an organization can go on doing whatever it was founded to do.
That's the easy way, said David Tucker of the Seattle IRS office.
Then there is the hard way. Nonprofit organizations failing to heed the new requirements, which were approved in 2006 with a three-year phase-in that started in 2007, will lose tax-exempt status.
And that changes more than the letterhead or Web page, Tucker said. "If they lose their status, they have to re-file." That can take up to two years and a good deal of scrutiny from the government.
The IRS has made a "one-time deal" to extend the filing deadline to Oct. 15, he added. Organizations that fail to file on time will have tax-exempt status revoked, and the IRS will publish a list of these revoked organizations in early 2011, according to a news release. Donors who contribute to at-risk organizations are protected for tax purposes until the final revocation list is published.
In May, 49 organizations in Walla Walla County were on the hot seat, noted Sandy Gill with Spokane-based Northwest Nonprofit Resources. When the story broke, the calls that came in were hard to fathom, she said. "People had no idea what they needed to do, or if someone had already called. Some didn't know the legal address of their organization or even the legal name."
Not every group listed may still be in operation, Gill said. "Or they may think 'I don't need to pay attention to this.'"
Rest assured, the IRS will pay attention to those who don't, she said.
Included in the 38 local nonprofits listed at the National Center for Charitable Statistics as needing to file are a number of 4H clubs, several foundations and a sprinkling of sports associations.
Gill is eager to help organizations in the quest for compliance. She can be reached at 509-325-4303. The IRS has information and guidance at tinyurl.com/39hxabx.
Sheila Hagar can be reached at email@example.com or 526-8322. Check out her blog at blogs.ublabs.org/fromthestorageroom.