NEW ROCHELLE, NY — The coverup of financial malfeasance at the New Rochelle Fund for Educational Excellence continues unabated.
In December, Board President Jonathon Stark said the NRFund was preparing necessary tax returns and reapplying for tax-exempt status and once “the situation” was resolved the 990 tax forms they have not filed since 2016 would be publicly available.
“We are hopeful this can be accomplished by February 2022,” said Stark.
It is past “by February”.
No “tax returns” have been made public.
In what can only be described as incredible chutzpah, Stark now says that having failed to file its required 990 tax forms for four years, the revocation of its tax-exempt status in 2021 exempts the NRFund from answering any questions of any kind about the ongoing financial malfeasance or even the most fundamental questions such as who was on the NRFund Board over the past four years, who were the board officers or when they were first notified by the IRS of the revocation status.
For reasons that they have yet to explain, they have repeatedly invoked “COVID-19”, like a mantra, to explain why they did not file 990s. They last filed a 990 in 2016. The pandemic began in the United States in 2020.
Stark misses the point.
The issue is not what the NRFund is legally required to do at a minimum but whether he — or successor — intend to address the reputational damage he and his current and past board members have inflicted on the New Rochelle Fund for Educational Excellence, and to address allegations of bribery, kickbacks, and self-dealing among board members and their families which appear to be the motivation for not filing the 990 tax forms in the first place.
The IRS took action on May 15, 2021, to revoke the NRFund’s tax-exempt status.
Despite this, the NRFund continued to actively promote itself as a 501(c)(3) tax-exempt non-profit organization for more than six months after the revocation.
The NRFund has refused to respond to questions or produce records for inspection and copying.
On December 1, 2021, we asked NRFund Board Chair Jonathon Stark a series of questions:
- 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- What is the date the fund’s not-profit status was revoked?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’s that it does not have non-profit status?
- How did this impact the pancake breakfast in 2021?
- Anything else you care to add?
Note, we did not ask for any 990s or related tax records or any other financial records in our initial request. More on that below.
After getting the runaround, we subsequently asked for a list of board members during the period where 990s were not filed, along with any officer titles, whether Ingerman Smith provided legal services to the Fund, the 990s for 2017, 2018, 2019, and (if completed) 2020 and if not available the top-line numbers for each of those years (total revenue and expenses and total assets and liabilities). We also asked if they intended to remove or unpublish past solicitations and statements where the NRFund fraudulently represented itself as a non-profit.
Superintendent Jonathon Raymond has likewise refused to answer questions about the role of the school district in the oversight and operation of the NRFund. In short, the NRFund has no mission if cut off by the City School District of New Rochelle.
After not receiving a response to any of our questions or records requests, Talk of the Sound filed Form 13909, Tax-Exempt Organization Complaint (Referral) with the Internal Revenue Service. Boxes checked off in the form under Nature of Violation are as follows:
- Directors/Officers/Persons are using income/assets for personal gain
- Organization refused to disclose or provide a copy of Form 990
- Organization failed to report employment, income, or excise tax liability properly
- Organization failed to file required federal tax returns and forms
- Organization engaged in deceptive or improper fundraising practices
After still not receiving a response for two weeks we expanded our request on December 14, 2021, to include “every single record for the past 10 years — every financial statement, budget document, annual list of employees, consultants, board members and board officers, every contract, invoice and payment, every bank statement, check, wire transfer, ATM receipt, every T&E report, receipt, and reimbursement and every other financial record, as well as all board agendas, meeting minutes, and communications to the board, all IRS tax forms and communications.”
Stark finally responded, more than three weeks after our initial request on December 23, 2021:
At the time you contacted us and asked for public disclosure of our tax returns, you informed us that you were aware that in August we had been placed on the IRS’ automatic revocation list (COVID) with a revocation date of May. As you know, consistent with being listed on the IRS’ automatic revocation list and our loss of tax-exempt status, we do not at this time have an obligation to make our tax returns available for public disclosure.
In your most recent request, you ask for ten years of our documents, including ATM receipts. Although section 6104(d)of the Internal Revenue Code, and the regulations thereunder, requires tax-exempt organizations to publicly disclose, or make available for public disclosure, their application for tax-exempt status and related IRS correspondence, as well as certain tax returns for a period of three years after the filing due date, such requirements apply to organizations that are currently tax-exempt. Furthermore, the ten years of documents you request fall outside the scope of section 6104(d).
As we previously indicated to you, we are working on reapplying for tax-exempt status with retroactive effect and preparing necessary tax returns; we are hopeful this can be accomplished by February 2022. Once the situation is resolved, we will make our Forms 990 publicly available to the extent required under section 6104.
The first sentence of Stark’s statement — “at the time you contacted us and asked for public disclosure of our tax returns” — is a flat out lie. There is an email record of our request. In our initial email on December 1, 2021, described above, we did not ask for any tax documents.
Stark says “we are working on reapplying for tax-exempt status with retroactive effect”.
The IRS says “The law prohibits the IRS from undoing a proper automatic revocation and does not provide for an appeal process.” There is no retroactive effect.
RELATED
IRS Revokes Non-Profit Status of The New Rochelle Fund for Educational Excellence
Federal Complaint Filed Against New Rochelle Fund for Educational Excellence