Jonesville Historical Society funding questioned

Group to pursue federal tax-exempt status

By Troy Brooks -

JONESVILLE — Questions concerning the Jonesville Historical Society were discussed during Jonesville’s budget meeting Monday evening. After discussing the town’s insurance plans for the coming year, Councilwoman Judy Wolfe, who also serves as president of the historical society, asked the council to ask her questions concerning the historical society and the heated criticism revolving around the organization.

“I know the basic for the consternation is coming from the personal attacks,” said Wolfe. “I have offended people in the past and that is one of the primary sources for the attacks.”

The Jonesville Historical Society is a nonprofit corporation which has worked with the town to preserve the region’s history and gives opportunities to the community to understand the town’s past through exhibits, presentations and events such as the Jonesville Jubilee and the Memorial Day service at Mineral Springs Park.

Each year, the town allocates special funding to support the society’s projects, but those allocations have come under fire recently at town council meetings by local resident Bridget Henderson. The allocations started in 2010 and the town has been giving the historical society $6,750 a year.

“We have worked in conjunction with the town and for the town since the historical society was put together,” said Wolfe. “There is no other agency in town that does what we do for the town. At the Jonesville Jubilee, if you don’t make $15 we don’t collect $15 if you set up a vendor’s site. We try to be fair to people.”

One of the things that’s been in question is the historical society’s status as qualified tax exempt and a non-profit that is not registered with the IRS.

“We are a registered, tax-exempt nonprofit corporation in the state of North Carolina,” said Wolfe. “We’re not registered with the IRS, but we don’t need to be because everything we do, everything that we apply for is through the town.”

According to Wolfe, it costs $60 to register as a nonprofit in North Carolina, while it costs $700 to register with the IRS. The society works under the town’s federal status and the application was completed with the town using its federal ID number.

Town Manager Scott Buffkin noted that the Jonesville Historical Society is verified with the NC Secretary of State under Yadkin Valley Museum Inc. According to him, there’s a difference between being a nonprofit corporation for NC and getting the IRS tax-exempt.

“From my understanding, the town can give money to a nonprofit organization to fund any activity that the town could do itself,” said Buffkin. “We could certainly run a museum or a veterans park or sponsor a festival. Any of those things would be OK for us. As far as IRS rules, I’m not with IRS. I’m not here to enforce IRS rules. If somebody has concerns they should contact IRS.”

Kim Hibbard, general counsel with the NC League of Municipalities, explained the rule of municipality donations to nonprofits.

“The general rule is that the municipality can appropriate money to any person, association, or nonprofit corporation if it’s going to carry out a public purpose with those funds and if that purpose is something the town itself is authorized to engage in by statute,” said Hibbard. “It’s mainly key to whether the organization will be carrying out a public purpose and that public purpose is something the city could otherwise do itself. If there was any kind of a guideline on tax ID, it would come out of Local Government Commission’s guidelines.”

One subject that was brought up was that of donations being tax-exempt.

“If I wanted to make a donation that was tax deductible, I would ask for a receipt,” said Susan Cheek, treasurer of the Jonesville Historical Society effective July 1. “It is up to the person donating to ask for that receipt.”

As Mayor Gene Pardue said, “If you get lucky enough somebody says, ‘I’ll give you $5,000,’ somebody’s going to want a receipt for that. Now for two or three dollars, I doubt anybody’s going to be worried.”

Wolfe stated the society has never been asked to give a receipt for anything. Furthermore, she stated most donations fall between $5 and $10.

“The reasoning we don’t have that status is because we’re a tiny organization and we’ve always been a tiny organization,” said Cheek of the IRS status. “We work for the community under the umbrella of the town. Since these concerns have come to light, we would like to move forward. We have a treasurer that can keep budget and we’re going to try to obtain that nonprofit status that people so desperately want us to have.”

According to a spokesperson with the Internal Revenue Service who referred to, “Nonprofit status is a state law concept. Nonprofit status may make an organization eligible for certain benefits, such as state sales, property and income tax exemptions. Although most federal tax-exempt organizations are nonprofit organizations, organizing as a nonprofit organization at the state level does not automatically grant the organization exemption from federal income tax. To qualify as exempt from federal income tax, an organization must meet requirements set forth in the Internal Revenue Code.”

Wolfe has stated that she does want to register with the IRS and make the Yadkin Valley Museum Inc. its own independent corporation.

“As a matter of fact we already have the wheels going,” said Wolfe. “We’re setting up a new structure, but it takes around $700 to register with the IRS. We have never had $700 in our budget to do that registration, because of the liability insurance and fees we have every year. We set up North Carolina tax-free status so we could buy preventative insurance and insurance to protect the board members. We’re not eligible for town insurance, because we’re not the town agency.”

Cheek will be taking the spot of treasurer for the Jonesville Historical Society this year starting July 1 and she will be helping by keeping track of the society’s budget and finances.

“I have a lot of experience as a 20-year corporate banker. I’ve worked on a lot of budgets. So, since we’re going through a structure change with this new system it’ll be good to list the money we’ve started with, grants we’ve received, and keep track of each expense. The finances of the historical society have been questioned and that’s why I have volunteered; to help show everyone that everything is accountable for and there will never be a shadow of a doubt. I start my position in July.”

The council agreed that the historical society should push to file with the IRS this year as people think the organization is tax-exempt.

“You’re doing a super job with the History Center,” said Anita Darnell. “But the big fuss is ‘are you nonprofit?’ and if you’re not filed with the IRS, then by God get that certificate so people will quit worrying over it.”

Wolfe stated they will be working on the status once the new board starts in July.

Troy Brooks may be reached at 336-258-4058.

Group to pursue federal tax-exempt status

By Troy Brooks

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