The Burke Area Chamber of Commerce has had its nonprofit tax-exempt status revoked for several years for failing to file paperwork, according to the IRS.
The news comes on the heels of the resignation announced Monday of the chamber’s longtime president, Tim Tierney. It is unclear if the tax status situation played any role in his departure. Tierney hasn’t given a reason for his leaving.
The organization is now working with a certified public accountant and the IRS to resolve the issue, according to Linda Lotti, secretary of the Burke Area Chamber of Commerce.
“I have just begun the process, so have limited knowledge of the issue,” Lotti said in an email Tuesday afternoon. “Based on conversations in the past 2 days, the appropriate 990 forms have been filed for 2011 to present and I am working with the IRS to determine why the status is still not resolved, as well as ensure that the status will be retroactive to the date of initial revocation.”
She said it’s her understanding that to resolve the issue the chamber must submit a form and reinstatement fee, along with an explanation.
Tierney could not be reached for comment.
According to an IRS database, the Burke chamber had its tax-exempt status posted as revoked May 14, 2012, and the status has not changed since then.
An IRS spokesperson said he could not discuss a specific organization or what impact losing tax-exempt status could have on an organization. He referred questions to the IRS website.
The Burke chamber had been a 501(c)(6) organization, which is an exemption for “business leagues” such as chambers of commerce, the website says.
According to the IRS, contributions made to a 501(c)(6) cannot be deducted on taxes as contributions to a charitable organization. However, they can be deducted as a business expense.
An organization’s tax exemption is automatically revoked when it fails to file the paperwork to retain its tax-exempt status for three consecutive years, according to the IRS website.
It is possible for an organization to apply for reinstatement and make it retroactive. The organization much explain why it failed to file the required paperwork.
“Your request will be granted only if the IRS determines that the organization had reasonable cause for not filing an annual return or notice for three consecutive years and approves the organization’s exemption application,” the website says.
Tierney’s resignation was announced at a chamber meeting Monday. On Friday, the board of directors of the Kingdom Trails Association announced Tierney had resigned as executive director of that organization, effective that day.
In a letter emailed to chamber members, Tierney addressed both resignations.
“I am announcing that I have resigned my position as Executive Director of Kingdom Trails. In order to best move forward in a positive fashion, I have also decided to step away from the duties on the Burke Area Chamber of Commerce,” he wrote.
He did not state a reason for the resignations but talked about the growth of the chamber since he arrived at the organization 13 years ago.
“I am proud of my efforts here and to work alongside so many of you in making Burke a better place to live and visit,” he wrote. “It’s people collectively committing time and solution based energy that will continue to be the strength of this community.”
Laura Malieswski, the chamber administrator, also issued a statement on Tierney’s departure, thanking him for his service.
“We are all sad to hear of Tim’s resignation from Kingdom Trails and the Burke Area Chamber of Commerce, but we respect his decision and wish him tremendous luck in his future endeavors,” the statement read.
“As Executive Director of Kingdom Trails, he helped put Burke on the map as a world-class mountain biking destination,” the statement added. “As a volunteer officer of the Burke Area Chamber of Commerce for the last 13 years, Tim played a vital role in the activities of the Chamber, helped to increase our sustainability as a community organization, and helped us fulfill our ongoing mission to foster economic growth in the Burke Area.”