Nonprofits losing tax status

Tom Strigus started getting alarming letters from local tax attorneys three or four months ago.

The IRS planned to revoke tax-exempt status for the National Kitchen and Bath Association's local chapter if its members didn't act soon.

The IRS was enforcing a 2006 law requiring most tax-exempt groups to file an annual return or notice with the agency. Those that hadn't filed for three straight years - since 2007 - would lose their tax-exempt status.

The news came as a surprise to Strigus, a University City resident and the association's treasurer.

"I contacted our corporate headquarters," said Strigus. "We have filed for extensions. We're going through procedures to reinstate that."

The association still operates with tax-exempt status, but nearly 700 organizations in Charlotte and southern Mecklenburg County have been removed from the IRS tax-exempt roster.

Last week, the IRS's list of organizations having their tax-exempt status revoked includes about 80 based in Cabarrus County.

Among those named on the Cabarrus list are the Beverly Hills Swimming Club, the Goldenaires, the Odell Recreation Association, the Old Campground Cemetery Restoration Committee, Parents for the Advancement of Gifted Education of Cabarrus and Residents of Historic Concord.

The list includes sororities and fraternities at Johnson C. Smith University and UNCCharlotte and the Carolina Evangelistic Association at Garr Memorial Church, as well as several other ministries and faith organizations.

The staff at Garr church is working to reinstate its tax-exempt status, said pastor Randy Briscoe. He said the IRS had incorrectly classified the organization as a public charity rather than a church. The church is waiting for its name to be removed from the IRS list.

The vast majority of tax-exempt groups file annual financial returns, and 85percent of the 1.8 million tax-exempt organizations were not affected by the revocations, the IRS said.

The IRS published the names of revoked organizations on its website in early June. Donations to those groups made after the list was released are taxable, spokeswoman Jennifer Jenkins said.

Statewide, 6,363 groups lost their tax-exempt status, records show, including the Military Order of the Cootie of the United States in Fayetteville, the Hickory-based Unifour Citizens for Decency and the Transylvania Citizens Improvement Organization in Brevard.

The IRS said it believes most groups that lost their status no longer exist. It expressed willingness to work with small groups that want their status reinstated.

"We realize there may be some legitimate organizations, especially very small ones, that were unaware of the new filing requirement," IRS Commissioner Doug Shulman said in a statement. "We are taking additional steps for these groups to maintain their tax-exempt status without jeopardizing their operations or harming their donors." Staff writer Scott Verner contributed.