March 31, 2014

Oklahoma Watch Tax-Exempt Status Restored

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Oklahoma Watch’s tax-exempt status under the federal tax code was mistakenly revoked by the IRS recently but since has been restored.

The nonprofit journalism organization had applied for 501(c)(3) status in August last year, and that was granted in November. In February, revocation of the status was triggered because the IRS said it had not received three consecutive years of federal tax returns from Oklahoma Watch.

Oklahoma Watch Executive Editor David Fritze said two errors led to the temporary revocation. One is that the IRS incorrectly determined that Oklahoma Watch had not filed required tax returns for three consecutive years, from 2011 to 2013. However, Oklahoma Watch has not failed to meet that requirement because the deadline for filing a return for 2013 is May 15 this year; Fritze said the organization will meet that deadline. (Like other 501(c)(3) tax-exempt organizations, Oklahoma Watch does not pay federal or state income taxes, but files informational, Form-990 tax returns with details of its finances.)

The second error  was that Oklahoma Watch’s finances were reported for 2011 and 2012 as part of the filings of the Tulsa Community Foundation, of which Oklahoma Watch was a subsidiary before late 2011, when it became a nonprofit corporation registered with the state of Oklahoma. Oklahoma Watch will make a late filing of tax returns for the latter part of 2011 and all of 2012, in addition to 2013.

A letter from the IRS withdrawing revocation states, “We have confirmed that you were erroneously put on the auto-revocation list. You may disregard the CP 120A (revocation) notice we previously sent. You will be removed from the auto-revocation list and relisted in EO (exempt organizations) Select Check (an IRS online search tool) … during the next regular update.”

The letter adds, “Donors may deduct contributions to you as provided in section 170 of the code. Bequests, legacies, devises, transfers or gifts to you or for your use are deductible for federal estate and gift tax purposes if they meet the applicable provisions … of the code.”

Oklahoma Watch’s stated mission is to produce in-depth and investigative journalism on a wide range of public-policy issues in the state.