RICHMOND (WWBT)- It is something that is a standard deduction for many taxpayers in the United States. But a new policy by the IRS has wiped more than 6.000 non-profit organizations off the tax-exempt rolls in Virginia.
Mesa Vista Therapeutics in Powhatan is a non-profit program that uses horse riding as way to help people with various special needs.
They have long accepted donations with the promise that the donation is tax deductible.
But Mesa Vista, which still offers people the opportunity to donate online, is no longer tax-exempt. According to Elise L. Rose a CPA with Young Hyde & Barbour, they are not alone.
"I think it was 275,000 nationally, but in the State of Virginia there are over 6,000 organizations," said Rose.
Most of those organizations are small, and take in less than $50,0000 in donations a year and chances are the oversight is slight I could be something as simple as not filling out a form. The IRS is scrubbing its list, hoping to clear out organizations with tax exempt status that no longer exist.
"Being tax exempt is a privilege," said Rose. "So it is trying to really protect organizations that are either members or donors to various organizations and non-profits."
But for charities like Mesa Vista, the oversight could be damaging. And not just because someone might be less inclined to donate without the tax deduction incentive.
'In addition to the loss of support from the public," said Rose "They would also be a taxable entity and would have to pay taxes."
A representative from Mesa Vista told us over the phone that they are working to rectify the mistake, which rose believes is not much work. The IRS is hoping that reputable charities like Mesa Vista get the message and get back into compliance.
The entire list of Virginia non-profits who have lost their tax exempt status can be found here. (Courtesy of the Washington Business Journal)