The Columbia Basin Veterans Coalition has overcome what seemed like an unbeatable foe -- the Internal Revenue Service.
For 16 months, the Pasco-based nonprofit that helps Tri-City veterans receive benefits and runs a transitional housing program for homeless veterans has been operating without tax-exempt status.
The unexpected yanking of that status to allow donors to write off donations on their federal tax return put the nonprofit in the bitterly ironic position of discouraging the donations that are its lifeblood.
But earlier this week, Skip Novakovich, the nonprofit's president, was notified that its 501(c)(3) tax-exempt status had been returned retroactively, meaning all the donations received since May 2012 will be tax deductible.
The coalition was the victim of a law passed by Congress in 2006 requiring the IRS to kill the tax-exempt status of organizations that fail to file an annual return for three years in a row.
The IRS began to enforce the law in 2011, and since then more than 360 Tri-City area nonprofits have gotten their tax-exempt status pulled, according to IRS data. It's unclear how many of those nonprofits remain in operation.
Of those nonprofits, just 25, including the Columbia Basin Veterans Coalition, have been able to get their tax-exempt status back.
The coalition's leaders, who were notified in March 2013 of the revocation, contend they submitted the annual returns the IRS claims it never received. The IRS hasn't admitted making any mistakes, and IRS officials won't comment on individual cases.
Regaining that status has been Joetta Rupert's top priority since she became the nonprofit's executive director in March. It's written in red on the top of the white board in her office.
"We are totally dependent on donations," Rupert said. "We are totally dependent on grants."
Especially when trying to get larger gifts, having that tax-exempt status is critical, she said. It's a major incentive, and is required to get any kind of nonprofit status discount from businesses.
In fact, the coalition already received a $5,000 donation from Richland's HomeStreet Bank this week as a result of the nonprofit's tax-exempt status has been returned, Rupert said.
Novakovich isn't sure how much money the nonprofit lost out on, but estimates it was at least $100,000.
The coalition also didn't hold fundraisers for more than a year because of the problem. While it could have, Novakovich said the leadership made the decision not to because they couldn't guarantee donors would be able to deduct donations.
Novakovich said they hit so many dead ends, they weren't sure if they would ever get it back. Even U.S. Rep. Doc Hastings' office couldn't get far with the IRS.Still, the coalition has maintained its services, but hasn't been able to do more than that. "We've been kind of flying under the radar," Novakovich said.
It made it more difficult to open the Richland home for younger veterans, he said. It's the second communal living home the nonprofit has opened for its transitional housing program.
Homeless veterans are referred to the coalition through the Coordinated Entry System operated by Benton-Franklin Human Services. In addition to housing, the coalition provides case management and classes and a computer lab for veterans.
Now, Rupert said they will be able to do so much more for veterans in their current programs. She hopes to get donations to help offer more recreational opportunities.
And the coalition is on the hunt for a new service officer to help veterans apply for and receive the benefits they have earned from the Department of Veterans Affairs. The success rate for veterans is much greater with that kind of help navigating the system, Novakovich said.
Novakovich said the nonprofit lost the former service officer while dealing with the IRS paperwork snafu.
The coalition also will start a rental assistance program for Benton-Franklin Human Services to help honorably discharged veterans.
Novakovich said they have a chance to get back on track to where they were about two years ago.
"This community is great for helping veterans," he said.
-- Kristi Pihl: 509-582-1512; firstname.lastname@example.org
To donate: call 509-545-6558 or send to CBVC, 1600 N. 20th Ave., Ste. A, Pasco, WA, 99301.
Needed are: Donated website services; a working computer, printer and scanner for the nonprofit's Kennewick home; maintenance work for the van that takes veterans; patio furniture for the Richland home; coffee; sugar; tea; laundry soap and 30-gallon garbage bags.