Five nonprofits associated with Brown lost their tax-exempt statuses May 15 after failing to file the proper paperwork three years in a row.
Delta Phi Fraternity's Beta Chapter, Sigma Chi Fraternity's Providence Alumni Chapter, Alpha Epsilon Pi's Beta Rho Chapter, the Brown Football Association and American Friends of the Hakluyt Society — which supports publication of historical material and is affiliated with the John Carter Brown Library — are included on a list released June 9 of Rhode Island nonprofits whose tax-exempt statuses were revoked by the Internal Revenue Service.
Unless the organizations apply to have the status reinstated, donations to them will no longer be tax-deductible.
According to the IRS website, about 275,000 organizations throughout the country had their tax-exempt statuses automatically revoked after failing to complete the appropriate paperwork for three consecutive years.
Prior to 2007, nonprofits with yearly revenues less than $25,000 did not have to file paperwork with the IRS. But in the past three years, the IRS required organizations receiving less than $25,000 per year to fill out a new form, the 990-N e-Postcard. Nonprofits that failed to fill it out three years running saw their tax-exempt statuses automatically revoked.
Many of the nonprofits affected are no longer in existence or have merged with other organizations. Sigma Chi's Providence Alumni Chapter has been inactive for some time now, said Fred Monroe, controller at the Sigma Chi International Headquarters in Evanston, Ill.
The relatively recent advent of the 990-N requirement for small nonprofits took some organizations by surprise.
"As far as I am aware, AEPi at Brown has not lost its tax exempt status, even though at some point last year we might have been at risk of losing it if we hadn't taken the appropriate steps," wrote Leslie Maazel '12, president of Brown's AEPi chapter, in an email to The Herald.
But AEPi at Brown is listed among the Rhode Island organizations whose tax-exempt statuses were automatically revoked this year.
The American Friends of the Hakluyt Society lost its tax-exempt status due to a "lack of understanding the process," wrote Maureen O'Donnell, the society's secretary, in an email to The Herald. She said the IRS notification that Hakluyt was no longer a tax-exempt nonprofit caught her by surprise. But she learned quickly that the same had happened to thousands of small nonprofits across the country, and that the IRS was providing them the opportunity to reapply for their former status. Hakluyt sent their application in early August, and have yet to hear back from the IRS. O'Donnell said she is not worried that Hakluyt's application will not be accepted.
"I really can't see any problem with it," she said.
Jon Land '79, alumni president of Delta Phi at Brown and alumni adviser to the Greek system at Brown, said he doesn't believe many people know about the change in DPhi's tax status. "I'm not even sure the University is aware of it," he said.
Similarly, Davies Bisset '85, executive director of the Brown University Sports Foundation, said he wasn't aware the Brown Football Association had lost tax-exempt status. Bisset said he does not know why the appropriate forms were not filled out, but the change should not make a significant difference for the football program.
"Having (the Brown Football Association) set up as tax-exempt is not critical," he said, because the association doesn't receive many donations. Most of the money received by the team comes through the sports foundation, not the football association, he said. The Brown Football Association is more concerned with coordinating volunteer fundraisers and alumni relations than with collecting money, he said.
"Their work is more important than their (tax) status," Bisset said. "We think we're just fine."
