IRS: Small nonprofits at risk
August 20, 2010
If you are associated with a small not-for-profit organization, there’s a chance it could lose its tax-exemption status this October.
Internal Revenue Service spokesperson Bill Brunson says there’s a list with hundreds of Utah organizations at risk of losing their status. At least 50 of those are in Summit County.
In an effort to clear its books of dormant or dissolved charities, the IRS announced in 2006 it would purge from its lists all nonprofit groups that failed to file 990 forms for three consecutive years ending May 2010. Since so many organizations failed to do so, the deadline was extended to Oct. 15, he said.
Because there are so many potentially-legitimate groups still at risk, Brunson asked the media to notify readers of how to check the list.
"We must have a degree of reasonableness for the tax code," Brunson said in an interview. "Small charities may not have an accountant on staff and may not be aware there has been a law change even though there have been several attempts to notify them."
Several of the organizations on the list for Summit County are no longer active, such as the NOMA Business Alliance. Developer Mark J. Fischer now calls the district Bonanza Park.
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The Park Meadows Country Club is also on the list. There is no such place. Diane Rambo with the Park Meadows Club said the membership purchased the golf course some years ago and formed a new entity. The incorporation on the list no longer exists.
Rich Wyman, one of the founders of Citizens Allied For Responsible Growth, said he was surprised to hear that name again after so many years. It was headed up by Dana Williams before he became mayor and Wyman believes it dissolved after that.
Other groups on the list are very active including the Park City Area Homebuilders Association, Park City Area Lodging Association and the Park City Library Foundation.
The IRS website admits that some entities may be on the list by mistake and gives instructions on how to be removed.
The primary concern of the IRS is that small groups without the wherewithal to keep track of such changes may be negatively impacted, Brunson explained. That appears to be true of many Summit County entities.
The Coalville American Legion Post is very active, said commander Mike Peterson. Unfortunately, it struggled with leadership in recent years. The Kamas and Park City posts are also on the list.
About half-a-dozen groups on the list control water rights.
Frank Marcellin, president and ditch master of the Coalville & Hoytsville Irrigation Company, said he assumed his paperwork with the state was accurate and was unaware there had been a change with the IRS.
To learn more about the extension and the need to re-file, visit IRS.gov/charities. To check the list, visit IRS.gov and choose page 2 out of 5. The middle option reads: "Is your organization at risk." That page offers a PDF or Excel file for the state of Utah.
Utah law also requires all nonprofit organizations to register with the state Division of Corporations to reserve the name. They must also do so to obtain a license number for the purposes of opening a checking account for the group, explained division spokesperson Jennifer Bolton. If a group is accepting charitable donations, it must also register with the Division of Consumer Protection.