IRS Strips 11 Macomb Township Nonprofits of Tax-Exempt Status

As of June 8, the Internal Revenue Service has revoked the tax exemptions of 11 Macomb Township-based nonprofit organizations after the groups failed to file legally required annual tax forms.

Across the U.S., the IRS has revoked the tax exemptions of some 275,000 nonprofits, which, according to The New York Times figures, reduces the nation’s nonprofit sector by about 17 percent.

While IRS officials said they believe the majority of these organizations are defunct, they have also announced their intent to help existing organizations apply for reinstatement of their tax-exempt status.

“During the past several years, the IRS has gone the extra mile to help make tax-exempt groups aware of their legal filing requirement and allow them additional time to file,” IRS Commissioner Doug Shulman said in a release. “Still, we realize there may be some legitimate organizations, especially very small ones, that were unaware of their new filing requirement. We are taking additional steps for these groups to maintain their tax-exempt status without jeopardizing their operations or harming their donors.”

The new filing requirement to which Shulman refers is the Pension Protection Act. Passed by Congress in 2006, it requires all organizations to file annual returns with the IRS and do so for three consecutive years or risk its tax-exempt status being automatically revoked.

Small organizations were required to file for the first time in 2007, but because previous law required only organizations with annual revenues of $250,000 or more to file, many small nonprofits overlooked the change.

As many as one-quarter of all nonprofit groups known to the IRS stood to lose their tax-exempt status when the original deadline for complying with PPA came last year.

However, the IRS issued a reprieve and continued its efforts to inform nonprofits of the new filing requirements.   

“We know there will be some that still didn’t get the message that they needed to file,” said Lois Lerner, director of the division of the IRS that oversees tax-exempt groups, in an interview with the The New York Times.

The Macomb Township-based Horizons Church was one of these organizations to not "get the message." 

Knowledge that his organization's tax-exempt status has been revoked–at least according to IRS records–came as a surprise to Dan Mastrogiacomo.

"We're totally unaware and I'm not sure exactly what that would really mean for us as a church ... what it changes," Mastrogiacomo said. "It wouldn’t change the way we file anyway. I would have to look into it. It seems that if they were to drop that status, it wouldn’t change the way people give–their financial dollars–they are still able to write that off anyway because of our nonprofit status as a church."

Attempts made by Macomb Patch to locate and contact the other organizations listed were unsuccessful.

For those organizations that wish to reapply for tax exemption, the IRS has created a process to do so. For more information on this process, visit IRS.gov.