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Staff Reports

Eastvale – Another cluster of Mailboxes have been broken into last week at the corner of Post and Lost Fort Place, and please alert residents about their mail being missing. But most mail thefts occur at night, so its recommended to pick up your mail every day after your courier has arrived, most likely by 5 pm.

A few months back, residents reported thefts off Spring and Nicole Court, on the side of Riverboat and King River, and up and down Tisdale. Many believe that the thefts had increased at that time because of expected tax returns. However, these thefts have been going on for a long time and they are not unique to Eastvale. Mail thefts have been reported in Corona, Norco, Chino and other surrounding areas.

But local Police and the US Postal Service are adamant about stopping these thefts from occurring.

“The United States Postal Inspection Service will continue to bring violators to justice to secure the integrity of the U.S. Mail,” said Postal Inspector in Charge, Robert Wemyss in a statement. “Protecting the ability to use the mail in a safe and secure manner is at the core of the Postal Inspection Service’s mission,” he added.

“Mail theft and other property crimes are a rising problem and trend in this region,” said Corona Police Department Chief of Police Michael Abel. “We take these matters seriously and truly appreciate the joint cooperation in this prosecution. It’s important that we hold suspects such as these accountable for their actions.”

Staff Reports

Eastvale – In our investigative reporting series of local non-profits accountability, we have requested information and tax records for several area non-profits. Our response from 88 Impact Foundation, a local non profit who accepts donations from local residents, businesses, and government agencies, was “we are a private foundation and we do not have to disclose where our money goes out to.”

According to IRS.gov, this is incorrect. According to the IRS, you have the right to inspect and obtain a copy of a tax-exempt organization’s: Annual information returns (e.g., Form 990); Exempt status application materials; and Notice of status under Internal Revenue Code section 527(i).

“All we want to know is where the money goes. We are asking accountability,” said Michael Armijo, Editor of CityofEastvaleNews.com. “Nothing more, just where are you spending the money people and companies are donating. IF they are working with the city, and IF the city is spending money (labor, promotion, direct donations) on the foundation, then they are spending the taxpayers money. If the resident’s are donating, where is resident’s money going? That’s it.”

“As you have stated, 88 IMPACT Foundation is a 501(c)(3) private foundation, and as such is subject IRS regulations on all tax-exempt organizations and nonprofit organizations,” Anthony Chan, a freelance reporter, wrote in a letter to Hari Dihman, listed as the Principal in the 88 IMPACT Foundation.

The demand letter, which included the formality of content required under the Freedom Of Information Act, also stated; “According to the IRS, the following tax documents of all tax-exempt organizations must be available for public inspection and copying: Form 990, Form 990-EZ, Form 990-PF (Return of Private Foundation), Form 990-BL, Form 1065. 501(c)(3) Non-profit organizations must also provide Form 990-T for public inspection and copying.” The 88 IMPACT Foundation office personnel stated the opposite, that they were not required to comply and will not produce any documents regardless of IRS code.

According to their Facebook page; “The 88 iMPACT Foundation was built with the hopes of its founding family to create an impactful family legacy. As of April 22, 2014, the long talked about and anticipated 501(c)(3) Non-Profit 88 iMPACT Foundation has been filed & made active. 88 iMPACT Foundation will serve to further develop, support, educate, and create resources for all Small Business & Public Safety Agencies (i.e. Law Enforcement & Fire Fighters).” Their goal is to support the people that make our communities thrive economically & keep families, homes, and our businesses safe. “Under the California Public Records Act § 6250 et seq., I hereby request to inspect or obtain copies of public records of 88 IMPACT Foundation’s annual tax returns for 2014, 2015, and 2016 including: Form 990, Form 990-EZ, Form 990-PF, Form 990-BL, Form 1065, and Form 990-T,” the letter stated.

“The California Public Records Act requires a response within ten business days.  If access to the records I am requesting will take longer, please contact me with information about when I might expect copies or the ability to inspect the requested records,” Chan wrote. For exemption application materials, a community member is entitled to inspect or receive a copy of the organization’s exemption application (Form 1023, 1024, or other document required to be filed), any papers filed in support of the application and any determination letter issued by the IRS with respect to the application.

Nonprofits are required to file IRS Form 990 must allocate their annual expenses into three categories: 1.program expenses—expenses directly related to carrying out your nonprofit’s mission. 2. administrative expenses—expenses for your nonprofit’s overall operations and management—for example, costs of board of directors’ meetings, general legal services, accounting, insurance, office management, auditing, human resources, and other centralized services, and 3. fundraising expenses—including costs for publicizing and conducting fundraising campaigns, maintaining donor mailing lists, conducting special fundraising events, and any other activities that involve soliciting contributions. The IRS does not require that nonprofits spend any particular portion of their income on each category. It just wants nonprofits to report how they spend their money, according to nolo.com.

Failure to comply with public disclosure requirements can result in “a maximum penalty of $10,000 for each failure to provide a copy of an annual information return.”

Next month we will follow up with the information requested.

Staff Reports

Eastvale – Local nonprofits have been under scrutiny and a lawsuit is being filed this week, which has opened a can of worms in compliance and liability. Some non-profits have reportedly experienced mishandlings of their finances, refusals to release tax records, and non-filings of IRS documents. A local Chamber is now being sued and other non profits are being requested to show their finances.

The local Chamber of Commerce is being sued this week as legal documents were completed and were ordered to be filed. The exact amount and the defendants, which are the board of directors for refusing to pay and respond, will be released once the suit has been filed in court. Releasing the names of the board members personally being sued prior to the filing would be considered “third party disclosure.” After the filing all information will be released as it will then become public record, and the lawsuit will lead to subpoenas of their finances.

“The board members are covered under their Directors and Officers (D&O) insurance,” said a local agency who insures non-profits. “They will be fine as long as they have the required insurance. If a non-profit is running without D&O, they can be assuming personal liability.”

Incorporated non-profits are usually not personally liable unless neglect or specific harm is inflicted. But other ways a nonprofit board member might be held liable include:

• When a board member directly injures someone on purpose
• When a board member guarantees a loan or other business debt for the nonprofit which then defaults on that loan or debt
• When a board fails to make sure that the organization deposits payroll and property taxes or files mandated tax returns.
• When a board member engages in fraudulent activities or does something illegal or just plain reckless that causes harm, or mixes up nonprofit and personal funds.

As long as the nonprofit is incorporated and board members do nothing “bad,” they should be fine, however, serving on the board of an unincorporated nonprofit.

Board members, in that case, are not protected the way they are in an incorporated nonprofit. These types of nonprofits are more common than you might think, so check the organization’s incorporation papers before agreeing to serve on a board. If you are already involved in an unincorporated nonprofit, consider the pros and cons of incorporating.  You and your fellow board members might sleep better if you took the steps to become incorporated.

Just to make sure that no legal actions slip through the cracks of incorporation law, most experts do recommend that nonprofits purchase Directors and Officer (D & O) liability insurance to protect against certain kinds of lawsuits and other types of litigation.

Local non profits are many, and all must have a 501 (c) (3) status granted by the IRS. A specific rule on nonprofits is that the debt follows the entity.

So who is qualified to be a nonprofit? According to the Internal Revenue Service (IRS), the Exempt Organizations Select Check (Publication 78 database) provides a partial listing of organizations that have been recognized by the IRS as eligible to receive tax-deductible contributions. For information on other organizations that have been recognized by the IRS as tax-exempt organizations, you may call IRS Customer Service at 877-829-5500. You can also contact them through any of the other methods described in Publication 557. This information can be found at IRS.gov. A contributor can also check an organization’s exemption letter, which states the Code section that describes the organization and whether contributions made to the organization are deductible.

The IRS sometimes recognizes a group of organizations as tax-exempt if they are affiliated with a central organization. This avoids the need for each of the organizations to apply for exemption individually. For more information, see Publication 4573, Group Exemptions. Subordinate organizations exempt under group rulings are not separately listed in the Select Check (Publication 78 database); see Eligible Donees Generally Not Listed in Publication 78

According to the IRS, you have the right to inspect and obtain a copy of a tax-exempt organization’s:

Annual information returns (e.g., Form 990);

Exempt status application materials; and

Notice of status under Internal Revenue Code section 527(i),

In person at the organization’s principal office, or its regional or district offices, during regular business hours. Unrelated business income tax returns filed by organizations exempt under Code section 501(c)(3) are also available. You may also request copies of such materials in writing. The organization may charge a reasonable fee to cover copying and mailing costs.

You are entitled to inspect or receive a copy of any annual return for three years from the date the return was required to be filed (or, for an amended return, from the date it was filed). For more information, see the IRS’ frequently asked questions on public disclosure, the final regulations, or Disclosure Requirements at IRS.gov.

For exemption application materials, you are entitled to inspect or receive a copy of the organization’s exemption application (Form 1023, 1024, or other document required to be filed), any papers filed in support of the application and any determination letter issued by the IRS with respect to the application.

Stay tuned for our print edition to print the public record and our online version for updates, and an ongoing investigation highlighting local non profits and their compliance to IRS laws.

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