About 100 local nonprofit organizations have lost tax-exempt status, according to information from the Internal Revenue Service.
Some of the nonprofits seem to be defunct, while others may have simply let required IRS documents lapse or come under the umbrella of different organizations over the years and no longer exist independently. For instance, the General Mills Employees Club of Johnson City, listed by the IRS as a nonprofit, is likely one of the defunct organizations, as that mill on West Walnut Street closed in the early 2000s.
The Magnavox Co. of Tennessee in Johnson City is no longer considered tax-exempt by the IRS. Magnavox has not operated in Johnson City in decades; presumably, neither has the nonprofit.
Changes in status for nonprofit organizations are the result of a law passed by Congress in 2006 requiring most tax-exempt organizations to file an annual information return or notice with the IRS. This law automatically revokes the tax-exempt status for organizations that do not file for three consecutive years.
Lester Lattany, president and CEO of the United Way of Washington County, said the local United Way office received a notice of the pending IRS action some months ago and, as a service to the community, mailed letters to every nonprofit organization located in Washington County that was listed as being at risk of losing their tax-exempt status. Lattany said most of those letters were returned unopened, indicating the organizations no longer exist, “or there was no response at all.”
Of all those notified by the United Way, he said two or three organizations advised they had either filed the mandatory financial reports or were in the process of doing so.
Lattany clarified the status of two former Washington County organizations included on the list of those losing tax-exempt status. Those agencies came under the administration of other nonprofit groups some years ago.
Volunteer Johnson City, which previously operated as an independent 501c3 nonprofit agency that linked area volunteers with nonprofit groups in need of their help, became a part of United Way of Washington County prior to 2002 and has since continued its operations as “The Volunteer Center.” The Appalachian Girl Scout Council on Wildwood Drive in Johnson City, which Lattany said was actually organized as Girl Scouts of the Appalachian Council, came under the administration of the Girl Scouts of Southern Appalachian Council in Knoxville in 2009.
On the IRS list, accessible online at www.irs.gov, were some family cemetery trusts, various ministries and parent teacher associations. Three fraternities at East Tennessee State University also were on the list. These were Tau Kappa Epsilon, Sigma Nu and Omega Psi Phi.
According to university spokesman Joe Smith, Sigma Nu closed this past fall and Tau Kappa Epsilon is no longer active. Omega Psi Phi was inactive for a while but has since begun once again, Smith said.
“Essentially, it is up to each student organization to maintain their nonprofit status,” Smith said.
The school provides reminders to organizations to file tax-exempt documents with the IRS, but does not take on the responsibility of maintaining that status.
There are actually a number of organizations on campus that do not have nonprofit status, Smith said. Any organizations that may lose nonprofit status will not change in their mission, but may need to change the way tax returns are filed, Smith said.
For more information about the nonprofit revocations, visit the IRS website. Information about what organizations have lost tax-exempt status and how to regain it is also available on that website.