Nolose is temporarily not a Federal 501(c)(3) Income Tax Exempt organization. Nolose’s status as a California non-profit public benefit corporation has been suspended as well. We are currently resolving the situation. In the interest of transparency, we are letting you know what our legal status is and what that means for our community. Please see the questions and answers below. If you have further questions, you are welcome to write to feedback at nolose dot org.
What does that mean for the Nolose conference?
Nolose WILL put on a conference as planned in the summer of 2015, and can still raise funds for financial aid and contracts, so most of us will not notice any difference in the way that the conference feels. The major difference is that Nolose will be operating as a tax-paying business until our 501(c)(3) tax exemption application is filed and accepted, and sorting out the paperwork will continue to be a big part of our Board members’ duties.
What is the financial impact on Nolose?
Our attorneys have advised us that Nolose should expect to pay penalties and back income taxes to the IRS for the period where Nolose’s 501(c )(3) tax exempt status had been revoked. While we will not know the exact amount due until we complete our paperwork with the IRS, we do know that Nolose will have to pay back taxes and penalties for every dollar of revenue that we made from May 2012 until current. Even paying this sum, Nolose will have enough funds in the budget to put on a conference in 2015 and pay general operating expenses. Nolose will still be a vital, fully functional and solvent organization after paying our back taxes.
What’s next? Will Nolose regain 501(c)3 status?
We expect that Nolose will regain its non-profit public benefit corporate status in the state of California in the next few months, which will allow us to sign contracts and buy insurance, which will then allow us to contract with conference venues for next year.
Federal tax exempt status will take longer because of the changes in the tax law (which resulted in one in eight US nonprofit organizations losing their 501(c)3 statuses) and the gap in Nolose’s filing records. We have to submit a new application as if we were a new organization, and the approval process could take up to a year. The good news is that once our application for tax exempt status is approved on the federal side, our tax exempt status is applied retroactively once the IRS approves the exemption application, so any revenue Nolose brings in while our paperwork is in the queue should not be taxed.
What is the Board of Directors doing to keep something like this from happening in the future?
Our Treasurer, Rachel Kacenjar, is reporting her activities and sharing financial documents with the board, and our finance committee. Elaine Lee is working with Kacenjar in the re-application process and has found us legal counsel with the firm Goldfarb Lipman in Oakland, CA. We are currently seeking a California-based tax accountant familiar with non-profits to help us pay our back taxes and perform an audit on our finances.
We now have more committees to share the vast amount of administrative work it takes to run our organization. We think that this helps the organization have more checks and balances, and helps us work more sustainably. It’s an asset to have more people engaged with Nolose projects, visit our Committees page, or write to feedback at nolose dot org!
The Communications Committee is also working on a redesign of the Nolose website. The board has contracted with Devra Polack to launch the new site later this summer. One of the benefits is that it will be more accessible, and easier to navigate; the board will be posting meeting minutes and agendas more frequently. This will make it easier for the whole community to have oversight of Nolose’s activities and direction.
Can I still donate to Nolose?
Yes! Your donation will not be deductible as a donation to a charitable organization, but we welcome your financial support! You can donate by clicking here: http://nolose.org/donate. We will announce when your donations will be deductible.
The work that we’re doing right now is what Nolose needs to continue to grow and thrive, so Nolose’s volunteer board appreciates your understanding and support! Please keep talking to us and watch for announcements about our new website, board recruitment, and other exciting news!
–The Nolose Board
Becka Gorelick, President
Rachel Kacenjar, Treasurer
Alex Gino, Secretary