Yuma County organizations lose tax-exempt status

More than 70 organizations in Yuma County lost their tax-exempt status after failing to follow reporting requirements.

The Internal Revenue Service announced that the organizations did not file legally required annual reports for three consecutive years. However, the IRS believes the vast majority no longer exist.

Such is the case with the Pearl Harbor Survivors Association, which appears on the list. The Yuma organization disbanded four years ago due to dwindling membership.

“There's not enough of us anymore,” Betsy Hengl explained.

But other organizations might have forgotten to file the required reports or missed the deadlines. The City of Yuma Employees Association (COYEA) is one of the local groups on the list. Apparently, the IRS kept sending notices to the old City Hall and COYEA never received them.

“COYEA believes the revocation of our tax-exempt status was due mainly in part to a defunct mailing address the IRS has listed for our organization, which may have been used to send notifications of the new requirements to maintain our tax-exempt status,” Jeff Bailey, COYEA president, said.

However, Bailey also believes the organization will meet all of the criteria needed to reinstate its tax-exempt status.

Southwest Bowhunters of Yuma is also on the IRS list. Wayne Wittenberg, a member who is not an officer but is listed as a club contact, was surprised to hear that the organization is listed.

“I don't know why we're on the list.” He thought maybe the officers had forgotten to file the reports, but he noted that the organization is still very much in existence.

It's apparently the same situation with the League of United Latin American Citizens (LULAC) of San Luis, Ariz. Jesse Lopez, District 4 director, also expressed surprise at hearing that LULAC is on the list.

Asked why, Lopez replied, “I don't have that information.” But he confirmed that the organization is still very active.

The full list of organizations whose tax-exempt status has been revoked for failing to meet their filing requirement is available at www.IRS.gov. The IRS will update the list monthly to include additional organizations that lose their tax-exempt status.

Calls to a number of listed organizations yielded recorded messages announcing that the numbers have been disconnected or are no longer in service. So presumably many of the organizations are defunct.

A law passed by Congress in 2006 requires most tax-exempt organizations to file an annual information return with the IRS. Small organizations were required to file the report for the first time in 2007.

Last year, the IRS also published a list of at-risk groups and gave smaller organizations an additional five months to come into compliance.

“During the past several years, the IRS has gone the extra mile to help make tax-exempt groups aware of their legal filing requirement and allow them additional time to file,” IRS Commissioner Doug Shulman said.

The IRS is allowing revoked organizations to apply for retroactive reinstatement and is offering relief for small organizations with annual gross receipts of $50,000 or less for 2010.

The relief allows eligible organizations to regain their tax-exempt status retroactive to the date of revocation and pay a reduced application fee of $100 rather than the typical $400 or $850 fee.

More information on the reinstatement process, including retroactive reinstatement, can be found on IRS.gov.

The IRS noted that this listing “should have little, if any, impact on donors who previously made deductible contributions to auto-revoked organizations.” Donations made prior to the listing remain tax-deductible.

However, the IRS stressed that, going forward, organizations on the list that do not receive reinstatement are no longer eligible to receive tax-deductible contributions and any income they receive may be taxable.

Mara Knaub can be reached at mknaub@yumasun.com or 539-6856.