Business & Tech
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.
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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.
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"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 Posted91-0951591
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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