Wednesday, July 30, 2014

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Charlotte Catholic High School Foundation loses tax-exempt status

CHARLOTTE — A non-profit foundation that supports Charlotte Catholic High School is alerting supporters this week that the Internal Revenue Service has revoked its tax-exempt status after it failed to submit required tax documents for three years.

The Charlotte Catholic High School Foundation lost its 501(c)(3) status after failing to report its finances to the IRS in 2008, 2009 and 2010. The annual report, called a Form 990, is a notice that the IRS requires from most tax-exempt organizations. It provides information about the organization's mission, programs and finances.

The foundation, which is a separate entity from the Diocese of Charlotte, is notifying supporters that it is no longer eligible to receive tax-deductible contributions until the IRS reinstates its 501(c)(3) status. The foundation's status has no impact on the charitable status of diocesan parishes, schools or foundations.

The IRS announced the revocation of the tax-exempt status in July 2012. According to IRS guidelines, donations made before the announcement are considered tax-exempt. In January 2013 the foundation reapplied for its tax-exempt status and asked that donations made between July 2012 and January 2013 be considered tax-exempt as well.

Cynthia Grim, president of the Charlotte Catholic High School Foundation, says the failure to file was "purely an oversight," and occurred at a time when the IRS changed the rules over which organizations had to file the Form 990s. Grim says there are more than 100,000 charitable organizations that have had their status similarly revoked, and the IRS is not saying when organizations' claims for reinstatement will be addressed.

In a letter sent Oct. 14 to donors, Charlotte Catholic parents and supporters, foundation board members said they thought the IRS would reinstate the foundation's tax-exempt status quickly. However, "It has recently become clear that reinstatement could be delayed for an extended time-frame and that the date to which the reinstatement is retro-active is not certain," the foundation wrote.

According to previous IRS reports, the Charlotte Catholic High School Foundation had assets totaling $548,283 and income in 2007 totaling $200,388.

The foundation, established in 1974, raises money to support various programs and projects at Charlotte Catholic, most recently, for a proposed fine arts building to be built on campus. Past fundraisers have furnished the high school's chapel, provided grants to teachers, funded a new front entrance sign and a campus-wide security system, as well as paid for a new drum line for the marching band and tuition assistance. It holds fundraising events throughout the year, including a major gala held every spring.

Grim said the foundation's fundraising efforts will continue. Administration for the funds will shift from the foundation directly to Charlotte Catholic High School, which also has tax-exempt status. According to the foundation's statement, "We will support Charlotte Catholic as they(sic) plan and implement showcase events and experiences such as the Gala."

The foundation has taken steps to avoid the problem in the future, board members said. According to their letter to supporters, a local accounting firm is installing an automated system that will provide timely tax filings and financial reporting. The Moore & Van Allen law firm has also been retained to address tax and legal issues.

— Catholic News Herald

FROM THE PASTORS

Read and listen to homilies posted regularly by pastors at  parishes within the Diocese of Charlotte: