Local organizations scramble to meet IRS regulations
As a result of the Pension Protection Act of 2006, the Internal Revenue Service reviewed past tax records of non-profit agencies, and several in the Greencastle area lost their tax exempt status last summer. While the law intentionally addressed pension reform, it added terms for miscellaneous issues, such as tax courts, federal mine safety, duties on imported goods and exempt organizations.
The IRS revoked the status of organizations that did not file Form 990, 990-EZ, 990-N or 990-PF for three consecutive years. Those are all returns for organizations exempt from income tax. The list was published June 8, 2011. Some small groups which did not have to file before 2006 were suddenly required to, and many of them were run by volunteers. Today board members are working to regain the status they lost. Outside the good graces of the IRS, they have to pay state income tax, sales tax on purchased items, and people making charitable donations to them may not claim a tax deduction.
On the outs
The Greencastle-Antrim Organized Youth Foundation, established in 1981, is no longer registered with the IRS. Treasurer Mike Bock just saw a letter from the agency in March. The G-AOYF board is down to three members, all volunteers. They had a lawyer review the paperwork.
"If the IRS agrees, we get it back," said Bock. "If we owe, we can renew after we pay the taxes. But we aren't required to file taxes because we don't have more than $25,000 income a year."
The board received a response in April and everything is looking good. The IRS indicated that upon final approval, G-AOYF's status will be retroactive.
"They have been very nice to work with," he added. "I did return one donation and told the person I would accept it when our tax-exempt status was official again."
Bock, Rex Henry and Scott Kinsey want at least one more person on the board. Their organization gets revenue from people who rent the facility, the old highline train station on South Jefferson Street; from Boy Scout Troop 99, which meets there; and from people who rent Thomas the Tank for children's rides. Bock said G-AOYF received "a nice gift" a few years ago. The interest helps pay for maintenance expenses related to the 1909 building.
The Greencastle-Antrim Midget Football Association, started in 1983, is also trying to get its paperwork in. President Tom Wolfe said there have been mixups with the volunteer board, which changes as children grow up and new parents join. Certain forms just did not get filed.
"We need to get someone who knows what they're doing," he said light-heartedly. "They (IRS) don't make it easy."
The board is anxious to get its tax exempt status back, to avoid paying sales tax on supplies. G-AMFA gets its money from football registrations and fundraisers. The ball is rolling, with the first task to correct the IRS record that the association was called GMFA. Then, based on one checked box, the government thought Wolfe was the organization.
They have been in active contact with the agency. "We're good with Pennsylvania and the IRS," said Wolfe, who noted the deadline for all paperwork was Dec. 31.
Greencastle American Legion, founded in 1952, is also on the list. Home Association president Bob Daley was aware the loss of status was coming, but everything has already been squared away.
"The previous administration didn't take care of business," he charged.
Though not directly involved, post commander Tony Everetts concurred. "We're as legit as we can possibly be. We're cleaning up messes from years ago."
The Jerome R. King Playground Association, activated in 1957, is well on its way to IRS compliance. "We are getting everything up to date," said board president Lon Barkdoll. Some years the association did not have to file returns, based on contribution numbers, he continued, but in a key year they "just forgot."
"We hope it is resolved quickly, but the IRS is never fast. And we never received an early notice the IRS agent said we should have gotten."
The board submitted the required papers, which are being examined. "We've been advised that's good news, but it could take a couple months before we get the final word," Barkdoll said.
The Greencastle-Antrim Golden Age Center, established in 1983, is on the list, even though it was not required to file an annual return. No one panicked, or even knew about it, since the center does not exist as created. Traci Kline, director of the Franklin County Area Agency on Aging, explained that the county took over the Golden Age Center more than a decade ago. It originally stood as an independent facility for senior citizens. It is now part of the county system, which includes sites in Chambersburg, Fort Loudon, Mont Alto, Dry Run, Mercersburg, Upper Strasburg and Waynesboro. Any contributions to the senior activity centers are tax deductible.
Greencastle is the busiest location in the county, with 78 individuals making 1,500 visits each month. The congregant meal program is a draw. Meals are served at noon on weekdays for people 60 and over, and home delivered meals are also available.
"They are at no charge, but we always offer people an opportunity if they would like to donate," said Kline. All money goes back into programming.
The agency also is on the receiving end of charitable donations from organizations and bequests in wills.
Other Greencastle groups were on the June list, though some are not necessarily active organizations any more. They include Upton Community Improvement Club, Huyetts Mennonite School Inc., Bread of Life Camp Inc., Meyers Cemetery Association, Amvets and Charity Airlift.
A large number of local entities that met all IRS regulations were on another list, including churches, sports clubs, school-related bodies, civic organizations, foundations, youth clubs, Lilian S. Besore Memorial Library, the Rescue Hose Company and Allison-Antrim Museum Inc.