South Charlotte

752 nonprofits lose tax status

The IRS has revoked the tax-exempt status of more than 275,000 groups nationwide for failing to file annual financial forms.

Hundreds of disparate organizations in Union and Mecklenburg County are among those to lose the status.

The groups range from sororities at Wingate University to the Monroe Jaycees, the Sardis Oaks Homeowners Association in Matthews and International Faith Builders of Mint Hill.

All told, 55 entities in Union and 697 in Charlotte and southern Mecklenburg County have lost their tax-exempt status, an Observer analysis of IRS records released this month shows.

The IRS said it was enforcing a 2006 law requiring most tax-exempt groups to file an annual return or notice with the agency, and that starting in 2007, those that failed to file for three straight years would lose their tax-exempt status. The vast majority of tax-exempt groups file annual financial returns and 85 percent of the 1.8 million tax-exempt organizations were not affected by the revocations, the government said.

But for those that were, the IRS published the names on its website in early June, meaning donations to those groups made after the list was unveiled 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 believes most groups that lost their status across the nation no longer exist, and the agency 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."

One Wingate sorority plans to take advantage of that. The Chi Omega chapter's national office believes it had filed the necessary paperwork and was contacting the IRS to sort out the issue, Wingate spokeswoman Jennifer Gaskins said. The other Wingate sorority on the list, Zeta Phi Beta, has not had any members since spring 2009, according to the university.

Another group named by the IRS, the Union Symphony Orchestra in Monroe, remains very much alive. It had reorganized in 2005 with a new tax-exempt ID, office manager Deb Patton said. So the IRS move does not impact the group, just the former entity with the old ID, she said.

The Monroe Jaycees folded in January and owes $1,500 to the state chapter, N.C. Jaycees President Troy Powell said in an email interview. A few of the former Monroe members are trying to organize a Union County Jaycees.

No contact person could be reached for some of the other local organizations on the list, including International Faith Builders, Sardis Oaks Homeowners Association, Monroe's Adhesives Manufacturers Association of America, Yummy Club of Monroe and the Central Piedmont Arabian Horse Association of Waxhaw.