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A taxing task with nonprofits 

Misty Bunten recently made a crucial entry into her computer calendar: In December, file for tax-exempt status for her employer, Care and Share Food Bank for Southern Colorado.

Last time around, the local food bank neglected to obtain such status, putting its property into a dangerous legal area. Without renewal of its yearly tax-exempt application by the April 2009 deadline, Care and Share was actually considered taxable under the law. And without payment of those taxes — which, in Care and Share's case, would amount to $7,534 — the county could have sold their property for exactly that amount.

It didn't happen, because El Paso County Treasurer Sandra Damron didn't let it happen; she figures that if she prods them enough, nonprofits eventually will file the proper paperwork. But as of a month ago, seven nonprofits — six of them churches — still hadn't.

They represent a tiny fraction of more than 6,000 tax-exempt properties that comprise nearly 23 percent of the county's $6.8 billion in assessed valuation. But these late filers represent a substantial time drain on Damron's office. Under the law, the treasurer can't give someone a pass on taxes unless they've filed with the state's Division of Property Taxation. Damron doesn't collect the paperwork, but when it's missing, she's tasked with chasing it down.

"The frustration is, I have a full-time employee spending a month of her time to make phone calls, send e-mails, trying to find someone who's responsible," Damron said then.

And even now, three nonprofits have yet to file their 2010 applications.

Damron sends nonprofit property owners repeated notices that they must file their tax exempt status in order to be tax exempt. If nothing is done by May, she sends delinquent notices in June.

Technically, at that stage, she could have sent the properties to a tax sale. Selling, though, would just trigger a bigger headache, and expense. It takes several years for a buyer to actually take possession of properties acquired in tax sales. And when a property is sold at a tax sale, districts that received the money must later return it, with interest, if the property is eventually declared to be tax-exempt. Churches and a food bank certainly would be.

So Damron has virtually no leverage.

Bunten, Care and Share's chief financial officer, says she filled out the application months ago but didn't pay the filing fee.

"We were under the impression that we had submitted it," she says. "When we received the tax notice in June, I thought, 'We already filed that.'" A recent notice got her attention, and she took care of the problem and created the electronic reminder for next year.

For New Testament Christian Churches of America Inc., at 1219 Yuma St., the delay was caused by workload. "The organization is in the process of finishing up the paperwork," Pastor Mark Usrey said in mid-October. "It's one person in our organization that takes care of all of it. It's quite a heavy workload."

He predicted the matter would be settled within days, and it was.

So Damron and her colleagues crossed those two, and two others who paid up, off the list, but three more remain. And April will bring a new application deadline.

"All they have to do is fill out the paperwork," Damron says. "I used to do it for First Christian Church, and it takes about 10 minutes."

Here are the amounts still owed as of Monday: $1,629 by the Black Forest Congregation of Jehovah's Witnesses, $3,000 by Spoken Word Evangelistic Ministries, and $36 by Church Universal and Triumphant.

zubeck@csindy.com

  • County treasurer chafes at chasing down nonprofits to renew tax-exempt status.

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