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Unless they take action before the middle of next month, some local organizations could be in danger of losing their non-profit tax-exempt status.
Based on a list compiled on June 30 by the Internal Revenue Service (IRS), 23 organizations throughout Crook County are at-risk. Statewide, 4,322 non-profits were listed.
According to Prineville Certified Public Accountant Mike Mohan, the potential loss of tax exemption is rooted in an IRS-instituted change regarding the required tax filings for lower-revenue non-profits.
Most non-profits are required to annually file a federal 990 form.
“It reports their income, expenses, and what their income was used for,” Mohan said.
However, for those organizations whose revenue was $25,000 or less, no such requirement existed. That changed in 2007.
“The IRS instituted a postcard 990N (form),” Mohan said. “Since then, they have been required to file a 990N every three years.”
The IRS has not yet received the required filing from the listed at-risk organizations, and the non-profit could lose their tax-exempt status if the IRS does not receive a 990N from them by Sept. 15. If that happens, the organization could wind up paying taxes on their earned revenue.
“They would have to file a different type of return and their income would be subject to tax, potentially,” Mohan said. He added that the other option is to re-file for tax-exempt status.
Part of the intent of the 990N postcard, in part, was to help the IRS locate defunct organizations. Mohan suspects that some of the 23 local organizations listed are no longer active.
Attempts by the Central Oregonian to reach the listed organizations revealed one such organization, the Crook County Fire and EMS Community Corporation. According to Crook County Fire and Rescue Deputy Chief Jim Dean, the non-profit was dissolved more than a year ago.
Other organizations, like the Paulina Parent Teachers and the Fraternal Order of the Eagles, are not inactive, but filed their 990N after June 30, when the IRS compiled their most recent list.
“I remember getting this postcard about a month or so ago,” said Prineville Eagles trustee Bill Gosnell. “I turned it over to our accountant and a few minutes later, she said it was taken care of.”
Another active non-profit, For the Children, a child abuse prevention organization, was not aware of the required filing until questioned by the Central Oregonian. According to Brenda Comini, a voting member of For the Children, the required 990N filing has since been completed.
For any local non-profits making less than $25,000 annually that are uncertain whether or not they are at-risk, the IRS website provides their list on their website. If the organization is listed, filing the 990N can be done online.
“This is an electronic thing,” Mohan said. “They (the non-profit) can go to the IRS website, log in with their EIN (Employer Identification Number) and fill out the report.”
