Little or no impact seen from IRS change on nonprofits

The Internal Revenue Service has revoked the tax-exempt status of 275,000 nonprofit organizations across the country — including scores in the Rogue Valley — but the vast majority of the agencies are losing their status long after they ceased to function.

Look over the list, which can be found at, and you'll find a few familiar names, including the Medford Jaycees, Rogue Opera Guild and Friends of the Medford-Jackson County Library. More than 3,700 nonprofits in Oregon are on the list, including more than 260 in Jackson and Josephine counties.

Having tax-exempt status is vital for nonprofits to put on fundraisers and attract donations from supporters who can in turn take tax write-offs. But most of the local groups listed stopped raising funds years ago.

The Medford Jaycees or Junior Chamber of Commerce was big in the mid-1900s but petered out 30 years ago, said Brad Hicks, president of the Medford chamber.

Rogue Opera development director Ginger Casto described the Rogue Opera Guild as "all wonderful, sweet people."

"But they've been fairly quiet in the background the last four years with 20 members at most and they meet every other month for lunch," she said. "They've been getting correspondence (from the IRS) and have been struggling about what to do."

The Friends of the Medford-Jackson County Libraries changed its name to Friends of the Medford Library and the old name has been inactive for a decade, said treasurer Mitch Seidman.

Southern Oregon Film and Video in Medford is among those listed as losing its nonprofit status but executive director Ken Westcott seemed unfazed.

"I don't care," Westcott said. "I haven't been contacted by the IRS. It will be up to the board what to do."

Filing the annual form does not come with a requirement to pay any fees to the IRS.

The list of nonprofits who lost their status locally includes names such as Southern Oregon Right to Life, Old Ashland Armory, Medford Human Rights Council, Medford Shopping Center Merchants, Jacksonville Odd Fellows and Southern Oregon Balloons.

Until 2006, nonprofits that made less than $25,000 a year didn't have to file the 990 form, which is equivalent to the W-2 in the profit-making world. A 2006 law required all nonprofits to file the form yearly — and stipulated that those who go beyond three years without filing would lose their status, said Bill Brunson, IRS spokesman in Phoenix, Ariz.

"Some are dormant, some complied and some didn't comply," said Brunson, who said the nonprofits got a heads-up notice from the IRS, then a one-year grace period. "Most are medium to small and have gone by the wayside, like small PTA groups or amateur athletics or scouting organizations — and we've got them on the books."

Casto, who has extensive experience with nonprofits, said, "I was shocked to see how many there were in Oregon and locally (on the revocation list). I know some still operate.

"Many assume that, since they're not making a lot of money or doing fundraising, they don't have to do anything," she said. "A lot of them became obsolete and didn't know what to do, so the IRS said, 'Let's clean the slate.' It's kind of a purge they're doing."

The IRS says it is just following the law, and made numerous efforts to inform nonprofits about the changes.

"The IRS started an outreach campaign when the law's three-year deadline hit last year," said IRS Commissioner Doug Shulman, in a news release. "It published a list of at-risk groups and gave smaller organizations an additional five months to file. During the past several years, the IRS has made an extensive effort to inform organizations of the changes in the law through multiple outreach and education avenues, including mailing more than 1 million notices to organizations that had not filed."

Nonprofits that feel they unjustly lost their tax-exempt status, said Brunson, should contact the IRS.

John Darling is a freelance writer living in Ashland. E-mail him at

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