Missed tax return filing deadline to hurt nonprofits
More than 900 nonprofit agencies with a Pittsburgh mailing address could be in danger of losing their tax-exempt status from the Internal Revenue Service.
Yesterday marked the deadline for nonprofits whose 2009 fiscal year ended Dec. 31 to file their tax return with the IRS. Organizations that failed to meet the deadline and did not submit returns for either 2008 or 2007 will automatically have their exempt-status revoked, said Mark Hanson, an IRS spokesman in Greensboro, N.C.
GuideStar, which maintains a database of tax returns that nonprofits are required to file to keep their exempt-status, said up to 925 nonprofits in Pittsburgh ranging from a boxing club to a senior citizens organization could be affected. Across Pennsylvania, the total is 11,300.
"In the long run, it's good for the sector," said Suzanne Coffman, a GuideStar spokeswoman. "In the short run, it's probably going to cause hardship for a number of organizations."
Coffman said about 350,000 to 400,000 nonprofits are at risk nationally. She estimated half of those groups are probably defunct.
Tax exemptions are important for nonprofits because they allow them to avoid paying federal income tax on their revenue and allow donors to claim tax deductions. In addition, many governments and foundations require nonprofits to have tax-exempt status to receive grants.
The Boxing Club of Pittsburgh has received $10,000 in state grants in the past, but is on GuideStar's list.
"That's a shame," said Bob Brown, club vice president and coach. "I guess we can't apply for any grants."
The club serves a dozen youths between the ages of 8 and 23. "Sometimes they're shy, and they can't throw a punch," Brown said. "Some want to test themselves. They're all looking for something. Generally, they find what they're looking for, and it's a rewarding feeling."
The Crafton Performing Arts Association is on GuideStar's list, but President Dennis Joyce said it shouldn't be. The association stages concerts in the park.
"I don't know how many people would not give if they weren't able to take it as a charitable contribution," he said.
Hanson said the penalty is outlined in the Pension Protection Act of 2006. Only churches and church-related groups are excluded.
Coffman said the process to reclaim exempt status takes months, and the fees run hundreds of dollars not including the cost of hiring an attorney.
The George Westinghouse Museum Foundation is on GuideStar's list, but Ned Schano isn't concerned. The spokesman for the Heinz History Center said the foundation no longer exists: The museum in Wilmerding merged with the history center in 2008.
Dorothy Gillespie of Jeannette founded Spay Today in 2001, a nonprofit that helped cat owners spay their pets. She can't ever remember filing a tax-exempt tax return with the IRS.
She said her group is out of existence after her volunteers stopped helping.
Angela's Angels in Greensburg provides prom gowns for high school girls who can't afford them.
Tom O'Brien, treasurer of the group, said he recently updated the tax filing with the IRS.
"We got it," he said.