WPCNR CAMPAIGN 2007. June 18, 2007: Mike McConnell, a resident of Battle Hill has sent a letter to the Treasurer of the Battle Hill Association announcing he will be communicating with the Internal Revenue Service as to how political activism on the part of association leaders affects neighborhood association tax-exempt status.

This issue has been raised by McConnell in the last week because of activism by neighborhood association members who are running for Common Council and association officers who have announced their support for nominated Common Council candidates. Mr. McConnell said in a letter to the Treasurer of the Battle Hill Association, he is seeking IRS analysis of whether this activity implying association endorsement by association violates tax-exempt status in White Plains. The letter follows:

Attn. Jiwanda V. Gale-Rogers, Treasurer

         Battle Hill Association

Hi Jiwanda,

I figured I would flag you on this since you are the Treasurer of the Battle Hill Association. I will be communicating with the IRS and NYS Taxation and Finance this week regarding the debate over the correct tax status of all neighborhood associations. As Treasurer of the BHA you would be the officer responsible for all this info and all filing requirements. If the IRS needs any info I will give them your name as the BHA Treasurer, OK. If it’s not you please let me know when your responsibility ended so I can tell them to contact the current Treasurer. If I receive additional information all will forward to each association as necessary.

Last month I inquired who might be handling these issues and Patti advised me she was un-sure if you were still handling this area. Could you get together with her and let me know who I should identify as treasurer if your not interested in the position anymore? As Treasurer it would be your responsibility to make sure all financial books, documents and tax reports are in order. You should review IRS doc 1024/ F990 and SS-4 in the event the BHA is not in compliance these docs may be required. I don’t want to appear ignorant and give out the wrong information so please check with the BHA CPA or Attorney if they have been retained. 

I originally researched this information at Patti Cantu’s request. 8 months ago. I spent a great deal of time researching this info and I made the following recommendations last year:

1)         The BHA needs to form an LLC or Not for Profit Corp. since they are involved with landlords-housing issues and public safety complaints against individuals and the BHA officers could be exposed to liability.

2)         The BHA needs to meet and consult with an CPA/accountant immediately in order to protect everyone from tax problems.

3)         Patti was advised to retain an attorney and I recommended that the charter and tax purpose be reviewed immediately. The BHA must evaluate whether their business activities are taxable in terms of fund raising, bank donations, political activity etc..

4)         The BHA needs to trim its list of directors from 10% of the membership to about 4 people not 8-10.

5)         The BHA was advised to procure a computer with a software accounting package and designate someone as bookkeeper.

6)         If it is determined that they meet the reporting requirements of a 501/503C NON Profit Organization then the Treasurer needs to file the appropriate paper work.

7)         If you have filed for Federal Tax ID # then they needed to identify your organizations purpose on the application. If they continue to operate under an officer’s social security        number then they need stick to collecting dues and not accept donations or engage in fund raising activities. They were putting themselves at risk.

8)         They were also advised to procure business liability insurance since they were engaged in Public Safety and Housing issues.

9)         All these efforts were made at the request of Mrs. Cantu and my recommendations were given at her request. I was clear that she and her officers needed to clean up their operation for there own protection.

I will update everyone once I get a determination on how the neighborhood associations should be classified for tax purposes. I am no longer a member of the BHA and I will be pursuing this tax information and association status issue as an independent citizen. We want to make sure our political system is sqeeky clean.

Regards

Mike McConnell

Cc: Patti Cantu

Cc: BHA Membership