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Local Churches, Organizations Up In Arms Over Requirement They Prove Their Non-Profit Status

By Mike Dunn

PHILADELPHIA (CBS) – City Council is at odds with the Nutter Administration over a law that forces non-profits in the city to prove they’re truly not for profit in order to continue being exempt from property taxes.

Starting this year, non-profits in Philadelphia have to submit annual proof of their status under a city law passed in 2013. The deadline to do so is March 31st. But Councilwoman Jannie Blackwell says many churches are up in arms over the requirement:

“Churches were getting ready to march on City Council today. I said, ‘please, please, don’t come. I’ll introduce a bill at the time of the public hearing, I’ll need you. Come then.’ So they were very, very upset. I’ve talked to almost every preacher in my district and in the city.”

So Blackwell today introduced a bill that eliminates the reporting requirement all together. At the same time, Councilman David Oh introduced a separate bill that maintains the requirement, but extends the March 31st deadline until June 1st.

“The problem is that people are not aware of (the requirement), and its catching them suddenly and its causing a lot of alarm,” Oh said.

And Oh said non-profits in the city’s immigrant community are having a particularly tough time:

“Once you get into organizations that don’t speak English, they don’t even know what’s going on.”

But the mayor’s spokesman, Mark McDonald, says the non-profits only have to submit a single document — a so-called “Letter of Determination” from the IRS:

“They do not need to send in anything but that. So is this burdensome, as a council member up for re-election would suggest? I would suggest not.”

And McDonald says any non-profit that is only now asking the IRS for that letter will get an extension from the city:

“If they are in the process of filing, they merely need to call OPA, and OPA will give them an extension.”

The issue of non-profits being exempt from property taxes arose in recent years because of the financial woes of the Philadelphia School District. About one-half of property tax revenues goes to the District.

McDonald says the city has 6,500 properties that are owned by groups claiming to be non-profit. The 2013 law requiring this annual reporting was authored by then-Councilman Bill Green, who now chairs the School Reform Commission.

Councilman Wilson Goode, a co-sponsor, would not comment on the Blackwell and Oh bills, but he said the focus of the measure is really on large institutions that are non-profit, like Universities:

“Its very important that we try to look at large non-profits and what they should be contributing, because so much of the real estate is tax exempt, that we’re losing money that could be going to the schools.”

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