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Several Kitsap non-profits lose IRS status; Kingston chamber’s status restored
POULSBO — Around 13 non-profit organizations in North Kitsap lost their tax-exempt status because they did not file legally required annual reports to the Internal Revenue Service for three consecutive years.
Poulsbo organizations losing their non-profit status include Always Hope Ministries, Associated Grandmothers Clubs, Back to Basics Poulsbo Al-Anon, Bantering Buck-A-Roos, Blind Dog Haven, Cottontail Kids 4-H Club, Far West Beef Shorthorn Association, Friends of the North Kitsap Pool, Hibshman Family Foundation, Western Center for Conflict Resolution, and World Peace Millennium Club.
BHS C Team Soccer in Kingston and Charlotte Mason Educational Found-ation in Suquamish also lost their status.
Some of the organizations may have simply shut down and did not inform the IRS. Efforts to contact a majority of the non-profits by North Kitsap Herald were unsuccessful because of phone numbers being disconnected.
Kingston Chamber of Commerce’s Executive Director Linda Fyfe believes many non-profits were mistakenly listed as losing their status.
“I think there are too many organizations on there that shouldn’t have been and mistakes were just made (by the IRS),” she said. “Unfortunately, the non-profits listed falsely now have their reputations at stake and this has caused a whole lot of distress unnecessarily.”
The Kingston Chamber of Commerce’s non-profit status was revoked for not properly filing. Fyfe recalled the IRS sending a message along with a notice asking the chamber to respond.
“We had indeed filed and sent our proof to the IRS right away,” Fyfe said. The status has since been restored.
Congress passed the Pension Protection Act in 2006, requiring most tax-exempt organizations to file an annual information return or notice with the IRS. For small organizations, the law imposed a filing requirement for the first time in 2007.
IRS automatically revokes the tax-exempt status of any organization that does not file required returns or notices for three consecutive years. This year, 275,000 organizations in Washington state have automatically lost their tax-exempt status.
“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 on the IRA website. “Still, we realize there may be some legitimate organizations, especially very small ones, that were unaware of their new filing requirement. We are taking additional steps for these groups to maintain their tax-exempt status without jeopardizing their operations or harming their donors.”
Existing non-profits that did not file do have the option of applying for reinstatement of their status. They must complete an application and pay a user fee regardless of whether they were originally required to file such an application.
The IRS announced transition relief for certain small tax-exempt organizations, so those with annual gross receipts of $50,000 or less for 2010 are made subject to the new "postcard" filing under the Pension Protection Act. The relief allows eligible small 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.
If the organization meets the requirements for tax-exempt status, the IRS will issue a new determination letter.