NEW ROCHELLE, NY — The Internal Revenue Service has revoked the 501(c)(3) non-profit status of The New Rochelle Fund for Educational Excellence.
According to the IRS website, the Revocation Date was May 15, 2021. The IRS added The New Rochelle Fund for Educational Excellence, commonly referred to in New Rochelle as “The Fund”, to its non-profit revocation list on August 9, 2021.
Despite the revocation of its tax-exempt status, The Fund continues to promote itself as a non-profit organization on Twitter and Facebook and on nrfund.org (above) and has yet to publicly announce the loss of its tax-exempt status.
Talk of the Sound reached out to The Fund Chairperson Jonathan Stark and Interim Executive Director Stephanie Tomei with a set of questions. Tomei deferred to Stark, who responded with a vaguely worded statement that appeared to attribute the failure to file tax forms in 2018, 2019 (along with 2020) to the COVID-19 pandemic.
“During this challenging time, as soon as we became aware of the issue, we began measures to resolve the matter expeditiously,” said Stark.
According to Guidestar, a charity-monitoring service, the last 990 filed by The Fund was in 2017 for the 2016 tax year. The IRS requires the last three years of 990 forms to be posted on the Internet. If The Fund has filed 990s for the 2017, 2018 and 2019 tax year they must be posted online, on either their website or on one of several recognized charity watchdog sites with a link to that site. There is no such information on the nrfund.org site.
The New Rochelle Fund for Educational Excellence was “established in 1998 in a cooperative effort by the Superintendent of Schools, members of the Board of Education and community leaders to preserve the New Rochelle tradition of excellence in education.”
In the years before its failure to file 990s, The Fund had become a money losing enterprise. In 2014, The Fund had total assets of $361,073 but by 2016, those assets dropped to $268,552.
In 2016, the last year for which there are publicly available records, The Fund lost $9,228 on $237,387 in revenue and $246,625 in expenses. The year before, in 2015, The Fund lost $24,833 based on $246,720 in revenue and $271,553 in expenses.
There are no public records available from 2017 until the present.
The 2017 990 return for the 2016 tax year lists compensation expenses of $84,684 but under Part VII, the section for compensation for officers, employees and consultants, only two names are listed, Matthew Costa (Co-Chairperson) and Derek Deutsch (Treasurer) and both are recorded as working zero hours per week and receiving zero compensation so the recipient(s) of the $84,684 in compensation expenses is not disclosed in the 990 form.
The 2016 990 return for the 2015 tax year lists just one name, Derek Deutsch (Treasurer) recorded as working five hours per week and receiving zero compensation, so the recipient(s) of the $83,224 in 2015 compensation expenses is not disclosed in the 990 form.
Part VII should list all board members, the highest paid employee (the Executive Director) and and consultants. None of them are listed in the available 990s.
The 2015 990 return for the 2014 tax year lists 5 officers (Co-Chairpersons Steve Silverman and Meredith Hilton, Vice President Dierdre Polow, Treasurer Cassandra Campbell, and Secretary Linda Kelly) but no other board members, no employees or consultants).
The Fund is required to file an annual information return or notice with the IRS. Form 990-series returns or notices are due every year by November 15th. Organizations who fail to file a Form 990-series return or notice for three consecutive years will have their federal tax-exempt status automatically revoked. An automatic revocation is effective on the original filing due date of the third annual return or notice.
IRS:
If an organization’s tax-exempt status is automatically revoked, it is no longer exempt from federal income tax. Consequently, it may be required to file one of the following federal income tax returns and pay applicable income taxes: Form 1120, U.S. Corporation Income Tax Return PDF, due by the 15th day of the 3rd month after the end of the organization’s tax year; Form 1041, U.S. Income Tax Return for Estates and Trusts PDF, due by the 15th day of the 4th month after the end of your organization’s tax year
An automatically revoked organization is not eligible to receive tax-deductible contributions and will be removed from the cumulative list of tax-exempt organizations, Publication 78. The IRS will also send a letter informing the organizations of the revocation.
Donors can deduct contributions made before an organization’s name appears on the Automatic Revocation List. State and local laws may affect an organization that loses its tax-exempt status as well.
The process of reinstatement is complicated and time-consuming. Organizations must first file all outstanding 990s, then re-apply for tax-exempt status. Compounding matters, the IRS says they are backed up on issuing Determination Letters due to COVID-19. In a good year, obtaining a Determination Letter can take between 6-12 months. With delays due to COVID-19, The Fund may be waiting as far out as 2023.
The law prohibits the IRS from undoing a proper automatic revocation and does not provide for an appeal process. An automatically revoked organization must apply to have its status reinstated, even if the organization was not originally required to file an application for exemption.
If the IRS determines that the organization meets the requirements for tax-exempt status, it will issue a new determination letter. The IRS also will include the reinstated organization in the next update of Tax Exempt Organizations Select (Pub. 78 database), and indicate in the IRS Business Master File (BMF) extract that the organization is eligible to receive tax-deductible contributions. Donors and others may rely upon the new IRS determination letter as of its stated effective date and on the updated Tax Exempt Organizations Select and BMF extract listings.
The current board of The Fund consists of four officers (Chairperson Jonathan Stark, Vice President Deirdre Polow, Treasurer Tom Livaccari, Secretary Meredith A. Hilton) and 11 members (Dr. Dagoberto Artiles, Margaret Bavosa, Iliana Fleischman, Laurie Forkas, Linda E. Kelly, Julia Muggia Ochs, Jonathan P. Raymond, Richard S. Relkin, LaThell Sebastian-Smith, Albert Tarantino, and
Nadine Wallace).
Questions asked of The Fund but not answered:
- Who was responsible for filing the 990s, and why was that not done?
- What is the date the fund’s not-profit status was revoked?
- What is the date the fund received notice of revocation?
- Did the fund receive any money after that?
- Is the current status that the fund does not have non-profit status?
- How did this impact the pancake breakfast in 2021?
- Can you provide a list of board members during the period where 990s were not filed, along with any officer titles? I recall there was an executive director or someone in that sort of role who is/was a school district employee at NRHS.
- The website indicates the involvement of Ingerman Smith. Do they provide legal services to the Fund? Do those services cover the period when 990s were not filed?
- Will you please provide the 990s for 2017, 2018, 2019, and (if completed) 2020? If not, please provide the top-line numbers for each of those years: total revenue and expenses and total assets and liabilities.
- Do you intend to remove or unpublish past solicitations and statements where The Fund is represented as a non-profit?
- Anything else you care to add?
EDITOR’S NOTE The available 990s raise numerous questions but we intend to do a follow up once the 990s for 2017, 2018 and 2019 are made available. We reached out to Superintendent Jonathon Raymond, New Rochelle Board of Education Julia Muggia Ochs and other Fund board members. We will update this article with any statements.
RELATED:
IRS Revokes Non-Profit Status of The New Rochelle Fund for Educational Excellence
Federal Complaint Filed Against New Rochelle Fund for Educational Excellence
This is not surprising one bit considering the son of one of the board members is a disgusting cyber bully thug. I’ll never forgive nor forget.
This fund is done. But the real question is, will there be indictments? Fleecing people never ever ends well.
The board of the fund can choose to continue operations but the board of education is not required to provide them in-kind contributions like office space at NRHS, phone service, internet service, legal service, etc.
Nor are they required to accept donations from the Fund.
I believe the New Rochelle Board of Education should terminate their relationship with the fund and all board members and school administrators should resign from the fund board.
THAT they CAN control.
Why would this privileged group of so called “philanthropists” think they were above following the rules? Did they think they were beyond approach? Four years of not filing taxes? Where did the money go? What are they hiding? Why?
These jokers have gone unchecked. And they have a Sansouci enabler on their board. I’m surprised that they didn’t reach out to Colasuanno to better cook the books.
Obviously they are hiding the fact that money was misappropriated. What a shame and another black eye for New Rochelle
Prior to publication, I communicated with a good number of NRFUND board members today. They appear to be oblivious to the concept that not filing tax forms for FOUR years (the 2020 deadline just passed) is a rather large red flag for financial irregularities like embezzlement, misappropriation, no-show jobs and the like. Not saying that happened but the New Rochelle Board of Education has an EXTENSIVE and WELL-DOCUMENTED history going back decades of corruption of just that sort.
There are so many questions here but let’s start with this one: why has this been kept secret for more than four months?
Is it not obvious that the NRFUND should have immediately announced that the IRS had revoked their tax-exempt status?
Instead, as is so often the case, it falls to Talk of the Sound to shine a light into the dark corners of New Rochelle. Sad.