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IRS Pulls Tax-Exempt Status for Mercer Island Women's Club, 32 Others

Most non-profit organizations losing the status are likely defunct.

The  and the Seattle Thunderbird Fleet are among the list of 33 local nonprofit organizations that lost their tax-exempt status this past week. 

The New York Times reported that the Internal Revenue Service revoked the status from 275,000 501(c) groups nationwide after they did not meet legal requirements to file annual tax reports for three consecutive years. 

The 501(c) status is named after the IRS tax code that offers tax exemptions to varying degrees for many different kinds of organizations. There are 28 types of nonprofit organizations are exempt from some federal income taxes. The most well known, under code 501(c)3, applies to religious, educational, charitable groups, among others, that offer donors a tax exemption on their own tax filings. 

According to a June 9 press release issued by the IRS, it has made several attempts to notify the groups, but the majority of these organizations are believed to be defunct. 

The news came as something of a shock for Jenny Guttman, Treasurer of the Mercer Island Women's Club, which recently celebrated it's status as a social club for all women on the Island at a 30th Anniversary party.

"We never tried to be a non-profit," she said. "We collect dues so that we can pay for our newsletter."

Guttman said the club, originally founded as the Mercer Island Welcome Wagon in 1963, re-incoporated as the Women's Club in 1981 as a social club under the IRS 501(c)7 tax code. That allows it to shelter member dues held in a bank account to be tax-exempt.

"We do have a really small budget," she said. 

Most of the money raised by the club is placed in a separate fund and administered by the Mercer Island Women's Club Civic Projects Group. That organization was established about 15 years ago and to date has donated approximately $100,000 to local causes and scholarships for Mercer Island students, Guttman said. She said the fund is unaffected by the club's loss of tax-exempt status and was not listed in the IRS's status-revoked group.

"You're putting a burden on a bunch of people who are trying to have a community connection with people on the island," she said.

Congress passed the Pension Protection Act (PPA) in 2006, requiring most tax-exempt organizations to file an annual information return or notice with the IRS. Previously, organizations with revenues under $25,000 were not required to file with the IRS. For small organizations, the law imposed a filing requirement for the first time in 2007. In addition, the law automatically revokes the tax-exempt status of any organization that does not file required returns or notices for three consecutive years. 

The IRS also believes the vast majority of small tax-exempt organizations are now in compliance with the 2006 law. “Still, we realize there may be some legitimate organizations, especially very small ones, that were unaware of their new filing requirement," IRS Commissioner Doug Shulman said. "We are taking additional steps for these groups to maintain their tax-exempt status without jeopardizing their operations or harming their donors.”

After reviewing the list, Mercer Island Chamber of Commerce Executive Director Terry Moreman ticked off several of the groups that have disappeared into the history books — including the Mercer Island Junior Chamber of Commerce.

"I remember back in California when my father was a young businessman, just starting out. That's when they had organizations like the Junior Chamber of Commerce," she said. 

Other defunct organizations include the Northwest Children's Academy (now the ), the Trinity Housing Association (under the ) and the Mercer Island Volunteer Fireman's Association, which folded several years ago after the city professionalized the the . 

The IRS issued instructions on how organizations can apply for reinstatement of their tax-exempt status, including retroactive reinstatement. In addition, the IRS announced transition relief for certain small tax-exempt organizations – those with annual gross receipts of $50,000 or less for 2010 – that were made subject to the new "postcard" filing under the PPA. 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.

Guttman, from the Mercer Island Women's Club, said the organization would seek re-instatement but would likely need legal help to properly complete their tax paperwork. She welcomed any offers of assistance from tax professionals to help guide the club back into compliance by contacting her directly at  jenny.guttman@gmail.com.

"We want to be legit," she said. "We don't want to break any rules. I guess that's the price of doing business as a non profit."

Click here to review the complete list of organizations that were revoked.

Below is a list of all 33 local organizations that formally lost "tax-exempt" status on June 9.

EIN NAME Description Address IRS Code Revocation Posted

91-0951591

CAN DO                             

 

PO BOX 1254                        

03

05/15/2010

6/9/11

91-0974721

THORNTON VIEW COMMUNITY ASSOCIATION 

 

3260 - 74TH S E                    

04

05/15/2010

6/9/11

91-0984996

NOR WES WA CHARTER OF THE AMERICAN 

 

3410 W MERCER WAY                  

06

05/15/2010

6/9/11

91-1026392

KOREAN METHODIST SERVICE MINISTRY  

 

7624 SE 37TH PL                    

03

05/15/2010

6/9/11

91-1122824

TRINITY HOUSING ASSOCIATION        

 

8501 SE 40TH ST                    

03

05/15/2010

6/9/11

91-1179718

NORTHWEST CHILDRENS ACADEMY        

 

4004 ISLAND CREST WAY              

03

05/15/2010

6/9/11

91-1193796

HUNT HIGH SCHOOL ALUMNI ASSOCIATION

 

9704 MERCERWOOD DR                 

07

05/15/2010

6/9/11

91-1261927

PACIFIC MONTESSORI SCHOOL          

 

4503 90TH AVE SE                   

03

05/15/2010

6/9/11

91-1381865

DESIGNING TOMORROW TODAY DT2       

 

PO BOX 1503                        

04

05/15/2010

6/9/11

91-1682567

KOLOBOK ARTS INSPIRATION ASSN      

 

2717 76TH AVE SE APT 26            

03

05/15/2010

6/9/11

91-1687762

CARITAS A NON PROFIT CORPORATION   

 

2433 84TH AVE SE                   

03

05/15/2010

6/9/11

91-1743996

LOVE BEGINS AT HOME                

 

9055 E SHOREWOOD DR APT 672        

03

05/15/2010

6/9/11

91-2015486

FLIGHT PLAN                        

 

3728 77TH PL SE                    

03

05/15/2010

6/9/11

91-2019056

U S CRUISE SHIP ASSOCIATION        

 

PO BOX 979                         

06

05/15/2010

6/9/11

91-1963470

THE STRIVERS                       

 

C/O 3066 67TH AVE SE               

03

08/15/2010

6/9/11

91-1920191

VAN DIEST MINISTRIES INCORPORATED  

 

2448 76TH AVE SE STE 100           

03

05/15/2010

6/9/11

91-6031184

MERCER ISLAND VOLUNTEER FIREMENS ASSOC.   

 

3030 78TH AVE SE                   

04

08/15/2010

6/9/11

91-6033080

MERCER ISLAND JUNIOR CHAMBER OF   COMMERCE 

 

PO BOX 411                         

06

05/15/2010

6/9/11

91-6047381

SEATTLE THUNDERBIRD FLEET          

 

PO BOX 1033                        

07

05/15/2010

6/9/11

31-1705531

MERCER ISLAND HISTORIC SITE        

 

PO BOX 251                         

03

05/15/2010

6/9/11

23-7179073

EAST SHORE SINGLES                 

 

3202 SHOREWOOD DR 135              

07

05/15/2010

6/9/11

31-1459322

NATIONAL ASSOCIATION OF MINIATURE  

 

 ENTHUSIASTSEASTSIDE MINIAT        

9212 SE 33RD PL                    

03

10/15/2010

6/9/11

47-0643557

BLACK WOMENS NETWORK               

 

2525 71ST NE                       

03

05/15/2010

6/9/11

51-0174990

MERCER ISLAND WOMENS CLUB          

 

PO BOX 505                         

07

09/15/2010

6/9/11

23-7085656

TOMMIE ROCHESTER FUND              

 

8429 SE 63RD ST                    

03

05/15/2010

6/9/11

91-6054847

WEST COAST MINERAL ASSOCIATION     

 

PO BOX 602                         

06

05/15/2010

6/9/11

91-6073308

MERCER ISLAND TEEN CENTER INC      

 

PO BOX 552                         

03

05/15/2010

6/9/11

94-3254743

THE SEATTLE MAGIC BASKETBALL CLUB  

 

7926 LAKE VIEW LN                  

03

05/15/2010

6/9/11

94-3052187

HIGHREACH PRESS                    

 

3611 74TH AVE SE                   

03

09/15/2010

6/9/11

94-3085409

JOHN MARK PETERS SCHOLARSHIP FUND  

 

9241 SE 60TH ST                    

03

05/15/2010

6/9/11

94-3103172

STAR FOUNDATION                    

 

8441 SE 68TH 343                   

03

05/15/2010

6/9/11

94-3150639

FREEDOM MASTER MISSION             

 

8435 SE 87TH ST                    

03

05/15/2010

6/9/11

94-3153525

IMMIGRANT EDUCATION FOUNDATION     

 

6920 94TH AVE SE                   

03

05/15/2010

6/9/11

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