Some Tier organizations lose tax-exempt status

The Press & Sun-Bulletin reported:

What do Vestal Fire companies 1, 2 and 3, the IBM Quarter Century Club and the local chapter of Optimist International have in common?

They're among the approximately 275,000 organizations that lost their tax-exempt status with the Internal Revenue Service because they didn't file legally required annual reports for three consecutive years.

"The IRS believes the vast majority of these organizations are defunct," said IRS spokeswoman Dianne Besunder.

Approximately 176 nonprofits from Owego to Sidney are affected. They include American Legion posts in Owego and Conklin, Kiwanis clubs in Endicott and Chenango Valley, the Broome County Sheriff's Benevolent Association, several cemetery associations, and Lions clubs in Vestal and Chenango Valley.

The Endicott-Vestal-Endwell Kiwanis Club just started in October, said member Alan Kline, who learned about the revocation from a reporter. The club, which didn't realize it had to file, will reapply for its nonprofit status, he said.

"It's less than a year that we've been incorporated," he said. "They should still have us, I hope."

The list also includes some lesser-known organizations: the Russian Moods Male Chorus, the Ozalid Club, the Southern Tier Dart League and the Brush Owners Association. The Binghamton Masonic Temple, Inc. and the Senior Citizens Club of Binghamton both list 66 Main St. as their address -- the old Masonic Temple, which has been empty for decades.

Also listed are four Vestal fire companies -- 1, 2 and 3 and Willow Point -- and Binghamton Crime Stoppers, which offers rewards to help solve area crimes and works alongside area police departments.

Vestal Fire Chief Christopher Lupold couldn't immediately be reached for comment and a call to the Binghamton Police Bureau's crime prevention unit, which normally deals with Crime Stoppers, wasn't immediately returned.

Last year, the Union Volunteer Emergency Squad received notice it was in danger of losing its nonprofit status. UVES sent in the needed forms, resolving the issue.

The Press & Sun-Bulletin reached out to multiple nonprofits on the list Friday afternoon. Many couldn't be reached because they listed only post office boxes; for others, numbers weren't listed, were no longer in operation, or calls and e-mails went unanswered.

The Pension Protection Act, passed by Congress in 2006, requires most tax-exempt organizations to file an annual information return or notice with the IRS. Small organizations were required to file for the first time in 2007. The law automatically revokes the tax-exempt status of any group that doesn't file the required documentation for three consecutive years, according to the IRS.

Last year, the IRS published a list of at-risk groups and gave smaller organizations an additional five months to file; about 50,000 did.

Revocation means groups will have to pay corporate income tax on annual revenue and may have their state tax exemptions revoked. Donors also won't receive tax deductions for gifts, according to the National Council of Nonprofits.

Groups can apply to have their tax-exempt status reinstated by filing additional forms with the IRS.

The New York Council of Nonprofits is going through the IRS' revocation list, said Valerie Venezia, the group's vice president of membership and marketing.

A number of the organizations on a previous list of those who still needed to file before the deadline weren't defunct; rather, they were usually small organizations that had transitions in leadership, were volunteer-driven or hadn't heard about the change in the form 990 filing requirement, she said.

More Information:
The New York Council of Nonprofits can provide assistance to its nonprofit members who have to file again for their exemption status. Members can call (800) 515-5012 or visit www.nycon.org for help. For more on what to do in case of revocation, visit www.councilofnonprofits.org/revocation.