650-plus nonprofits here lose tax exemptions

2011-06-19T00:00:00Z 2011-06-20T14:14:06Z 650-plus nonprofits here lose tax exemptionsBy Carol Ann Alaimo Arizona Daily Star Arizona Daily Star
June 19, 2011 12:00 am  • 

A right-to-die group and a "heavy-metal brass quintet" are among hundreds of Tucson nonprofits stripped of their tax-exempt status by the Internal Revenue Service.

More than a dozen religious ministries also are among the 650-plus local entities delisted for failing to meet new federal rules that took effect in 2007.

Smaller nonprofits - those with incomes less than $50,000 a year - have been required since 2007 to provide the IRS with basic verification that they still exist. Failure to do so for three years in a row results in automatic revocation of tax-exempt status.

The Tucson revocations are part of more than 4,000 statewide, and about 275,000 nationwide. They date to May 2010 and were announced last week by the IRS.

The IRS said most entities delisted are likely extinct because they didn't respond to repeated requests to verify their status. The agency has issued multiple warnings since 2007 about the consequences of ignoring the new law.

While it's widely known that charities and churches can qualify for tax exemptions, the IRS also gives breaks to other nonprofit outfits such as business and social groups. Donations aren't tax-deductible, though, for some of those other entities.

Local groups recently delisted include the Hemlock Society of Arizona, named for the suicide potion of Greek philosopher Socrates; the Gray Panthers of Southern Arizona, a group that fights age discrimination; The North American Alliance of Tanning; and the Relationship Enhancement Foundation.

Also among the now-defunct: the Tucson Press Club, Tucson Mountain Men Inc. and the Y2K Business Association.

Getting nonprofit status isn't cheap. It costs $400 to $850 depending on the outfit's expected annual income.

Karen McCloskey, a certified public accountant at BeachFleischman PC in Tucson who works extensively with nonprofits, said a certain amount of die-off is to be expected.

Some groups fade into oblivion as times change. Others fall victim to dwindling enthusiasm among founders and volunteers.

"Sometimes the reason or urgency goes away and the organization can't perpetuate itself," she said.

Contact reporter Carol Ann Alaimo at calaimo@azstarnet.com or at 573-4138.

 

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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