Paperwork problems jeopardize nonprofit status of several Broome organizations

Like hundreds of other area nonprofits, Union Volunteer Emergency Squad was in jeopardy of losing its nonprofit status.

The reason? Failing to file paperwork with the Internal Revenue Service.

"I honestly don't know why it wasn't sent in," said UVES Executive Director Matthew Fellows.

UVES is joined by hundreds of nonprofits in the Southern Tier who were flagged by the IRS as organizations that haven't filed their 990 forms -- paperwork required for nonprofits -- by an Oct. 15 deadline, meaning they could lose their nonprofit
status.

If that happens, the agencies could be required to pay taxes -- and perhaps more significantly, donors would find their generosity was no longer tax deductible.

The 990 forms verify to the IRS that the nonprofits are still in operation.

In 2008, the IRS established a new form -- the 990 -- to be filed annually by nonprofits. For those with an income of less than $25,000, the form was a 990N, said Kevin Stadelmaier, legal advisor for the New York Council of Nonprofits Inc.'s Buffalo office.

Over the decades, as groups were added to the IRS's nonprofit database, there was no mechanism to remove those that were no longer active. The 990N was established as a device to recognize which small nonprofits were still operating and which had
ceased to exist.

"The real reason why the law was enacted was to kind of cull out these nonprofits ... that were no longer conducting tax-exempt activities," Stadelmaier said.

For smaller organizations -- those with incomes of less than $25,000 -- filing with the IRS isn't a typical function, which is why they might have missed the new requirement, Stadelmaier said.

"They didn't realize they were required," he said. "They might have gone years and years without filing anything."

At UVES, the error was noticed recently, Fellows said. Actually, it was the IRS that noticed. Since then, the organization sent in its missing 990 forms.

"We had some internal issues that we self-reported," Fellows said. "Everything has already been sent in."


Each year, UVES has an independent audit performed by its accounting firm. The audits showed the bills were paid and the forms were filled out, but no red
flags went up about the missing 990s because UVES paid to have them completed and assumed they had been filed properly, said Fellows, who has been with UVES for the past year.

When contacted by the IRS, the first thought was the federal agency was at fault.

"We thought it was an error at first," Fellows said.

UVES is not alone. The Broome County Sheriffs Benevolent Association, Boys & Girls of Western Broome Foundation Inc., New York State Electric & Gas Foundation Inc., several American Legion posts from Bainbridge to Owego, various union branches and a host of other organizations and associations failed to file by the Oct. 15 deadline, according to the IRS.

Contacting nonprofits on the list was nearly impossible for this newspaper. Telephone calls were not returned, while others couldn't be contacted because they didn't have listed phone numbers and had only Post Office box addresses. Some of the
nonprofits on the IRS list include:
* Maine-Endwell Booster Club Inc.
* Endicott Rotary Foundation Inc.
* International Association of Fire Fighters in Johnson City
* Tioga County Industrial Development Corp.
* Vestal Lions Club
* Broome County Sheriff's Foundation
* Vestal Youth Football League Inc.
* Dress for Success - Binghamton
* City Rescue Mission Inc. in Binghamton

Also on the list is Binghamton Crime Stoppers, which is a participating member of Crime Stoppers International. The organization had invalid e-mail addresses on its web site regarding fundraising, publicity and general information. An e-mail and
telephone message sent to the website's administrator was not answered.

Crime Stoppers, which offers rewards to help solve area crimes and works alongside area police departments, failed to file with the IRS for the past three years, meaning the do-good organization might not be able to stay in operation as a nonprofit.

Not being able to contact nonprofits, some of which have addresses filed decades ago with the IRS, is another reason why some missed the deadline to file, said Kelly Mathews, chief operating officer and senior vice president of financial, accountability and compliant services with New York Council of
Nonprofits Inc.

"Getting the word out to a lot of those very small organizations -- it was probably difficult to find some of them," she said.

Though the IRS and groups like NYCON had extensive educational promotions regarding the new procedures, many smaller nonprofits, including those no longer in existence, weren't kept in the loop, Mathews said.

"I think a lot of organization, particularly the smaller guys, weren't aware of the filing requirements," she said. "Historically, there was nothing for those little
guys to report with." Read more here.