POTTSTOWN PA – More than 190 area charitable groups of all kinds, from religious bodies to foundations that help worthy students pay for college, are in jeopardy of losing their federal tax-exempt status because they failed to file necessary paperwork with the Internal Revenue Service during the past three years, the government agency said.

Complicating matters, the IRS acknowledges, is the fact that many charities in trouble still may not know the paperwork is overdue.

However, the agency is giving them until Oct. 15 to make amends. A number of them qualify to send what the IRS considers relatively brief forms to cover its reporting needs. That will allow groups to keep their exemptions, on which contributors rely to deduct donations when filing annual income tax returns.

A loss of tax-exempt status could crimp these charities’ fund-raising campaigns. It also could impact thousands of area residents who support the groups’ causes or beliefs, or who benefit from their’ efforts.

The IRS’ lengthy list of local charities facing revocation of their exemption includes:

• One listed with a Sanatoga mailing address, the Pottstown PA chapter of the National AMBUCS Inc.;
• Four designated as having “Pottsgrove” affiliations: Unit 2156 of the American Federation of Teachers, with a mailing address at Pottsgrove High School; the Pottsgrove Girls’ Softball Association, the Pottsgrove chapter of High Twelve International, and a program called “Partners For Safety” that is listed with a North Pleasantview Road, Lower Pottsgrove Township mailing address;
• 49 from Pottstown, 21 from Phoenixville, 16 from Collegeville, 14 from Boyertown, 12 from Harleysville, 11 from Douglassville, nine from Royersford, eight each from Birdsboro and Oley, six each from East Greenville and Spring City, five from Schwenksville, four from Kimberton, three each from Gilbertsville and Stowe, two each from Barto, Limerick, New Berlinville, and Red Hill; and one each from Bechtelsville, Parkerford, Pine Forge, Rahns and Zieglerville.

See a list of all affected local groups, compiled from the complete and most recently available (dated June 30, 2010, and downloaded Monday, Aug. 9) IRS information, here.

• For a list containing names and addresses of more than 12,600 groups at risk across Pennsylvania (including the locals), download a spreadsheet from the IRS here.
• Download the same Pennsylvania list as an Adobe Acrobat document here.

Some listed organizations may no longer be operating. Some may have merged with other groups. Some may have resolved their issues with the IRS after June 30 but have not yet been removed from its list. Unfortunately, according to area accountants, most are still in business as one- or two-person units with limited or no staff or budget, and who haven’t paid attention to notices about the IRS’ rules.

Their problems stem from a Congressional bill known as the Pension Protection Act of 2006, which took effect in 2007. As part of an attempt to encourage growing charitable organizations to be held financially accountable, federal legislators ordered non-profits with gross incomes of less than $25,000 annually to file a report every year with the IRS. It’s known as Form 990.

To ensure non-profits complied, the legislation carried a penalty: those who didn’t file for three consecutive years risked losing their tax-exempt status. Sure enough, three years after the law took effect, the IRS has come knocking on the doors of the delinquents. The IRS video above, hosted at its YouTube account, explains the requirements.

Nationwide, the agency is reported to have sent more than a million letters to non-filing non-profits, reminding them of their obligations. Because so many are in trouble it even created postcard-sized short forms that can be electronically filed.

Groups that lose their exemptions can have them reinstated, but at an average cost of several thousand dollars. The law does not give the IRS any discretion in its enforcement, an agency spokesman added, so  those who do not comply will lose their exemptions early in 2011.

Editor’s note: The Post thanks Chris Huff, a member of the writing team at The Pulse! – the blog of Pottstown advocacy group Code Blue – for suggesting this story and contact sources. If you’ve got a story idea or tip we should explore, e-mail The Post.

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