The La Habra Heights Improvement Association solicits contributions from residents & local businesses, and curries favor & positive feeling from the community, by claiming it is a charitable 501(c)3 non-profit, and that contributions are tax deductible.
However, the IRS Publication 78, a list of recognized 501(c)3 charities, does not include the La Habra Heights Improvement Association as a charitable organization. Only contributions to organizations recognized by the IRS are tax deductible.
In addition, the Improvement Association's publicly available 990 Tax Filings for 2006, 2007, & 2008, signed "under penalty of perjury" by Treasurer Jeffrey Heintz, state that the Association is a 501(c)4 non-profit, not a 501(c)3.
Excerpts from 3 Page 2007 990 Form (2006 & 2005 Similar). Red Outlining Added for Visibility
Page 1 contains Identifying info. Page 3 contains Signature
A 501(c)4 can be more involved in politics, at the trade-off of non-deductibility of contributions. Examples of 501(c)4's include employee unions and political action committees.
President Pam McVicar said that the 990 Filings were "errors".
A call to Improvement Association accountant Joe Mericle's office was met with the response, "how did you get our number?", and the request to leave a message. At posting time, calls had not been returned.
At the Annual Members Meeting in June 2009, held in the Multi-Purpose Room at City Hall, when concerns were raised over the safety of member personal information after the Improvement Association Vice President was arrested on 144 charges including fraud and identity theft, the Board touted the professional accountant they used, Joe Mericle, and that the Treasurer, Jeffrey Heintz, was a (former) police officer.
An important fiduciary responsibility of a treasurer for a non-profit, such as the La Habra Heights Improvement Association, is to ensure that the organization maintains it's 501(c)3 status in order to solicit and accept contributions as being tax-deductible in accordance with applicable laws and requirements.
The 990 Filings are a few pages long. It is unclear how Treasurer Jeffrey Heintz would miss an "error" of that importance year after year after year, since at least Fiscal Year 2005
The most recent annual filing, stating that the Association is a 501(c)4, was signed by Treasurer Heintz on February 6, 2009.
In response to a recent query about the tax deductibility of contributions, Treasurer Jeffrey Heintz, stated, "Yes, the Improvement Association is 501(c)3, tax deductible non-profit."
Could the recent refusal of the Association to release their financial information to members, and refusal to allow members to see changed by-laws indicate a deliberate change in the exempt status of the LHHIA?
A 501(c)4 status does allow an organization to participate in politics, which is strictly limited or prohibited for 501(c)3's.
As reported in a recent story, an Improvement Association Heights Life Editor worked on Carl Westerhoff's 2009 City Council campaign materials.
The President and another Association Director endorsed a 2009 Council Election Candidate, absent their Association titles.
The Heights Life, the association's monthly publication, has also included political stories and a "political" letter to the editor that likely would not have been allowed under their prior "non-political" 501(c)3 status.
A 501(c)3 organization is required to file a 990 Schedule A, listing contributions from government agencies, and the requirement to reveal the extent to which the organization is supported by public money. There was no 990 Schedule A included with the publicly available Improvement Association filings, consistent with it's filed status as a 501(c)4.
The Improvement Association receives substantial contributions from Los Angeles County, and in kind contributions from the City of La Habra Heights.
Business and individual contributors to the La Habra Heights Improvement Association may need to review the legality and consequences of past and future tax deductions, in light of the apparent federal non-deductible status of contributions to the Improvement Association as a 501(c)4.
IRS Charities Division Phone number to confirm 501(c)4 status 877-829-5500
See the Improvement Association 990 Filings for 2008, 2007, and 2006
Search IRS Publication 78 to confirm that LHHIA is not there link
Link to 990 Schedule A Form, which would need to be filled out if the LHHIA is a 501(c)3 non-profit link.
Status of deductibility of contributions to a 501(c)4 non profit link
A description of differences between 501(c)3 and 501(c)4 link-(Note:accuracy of offsite information has not been verified)