In a July 25 press release, the Holyoke Public Library announced that the library’s tax exemption from the federal government has been restored.
According to the press release, this reinstatement is retroactive to November 2023 and “donations to our organization are deductible for federal income taxes.” The library lost its tax-exempt status after failing to file required paperwork with the IRS for several consecutive years.
Although the library continued to exist as a nonprofit during this time, the inability to claim tax deductions and raise sufficient donations posed a threat to the institution: according to library director María Pagán, only 41% of the institution’s funds come from the city. By regaining tax-exempt status, donors can deduct their contributions from their taxes while the library is exempt from federal income taxes.
“The financial and legal stability provided by the restored status allows the library to focus more on its mission and services rather than on financial and regulatory concerns,” Pagán told Shoestring. “With the restoration of tax-exempt status, the library can approach long-term financial planning and development efforts with greater confidence and certainty.”
Following the federal government’s announcement in May, Pagán said the library sought legal and financial assistance to be reinstated as quickly as possible. “Our legal team completed and submitted IRS Form 1023, a request for recognition of exemption under Section 501(c)(3) of the Internal Revenue Code,” Pagán explained. “The finance team completed overdue 990 forms. The legal and financial professionals addressed and corrected any prior oversights that led to the suspension, such as the library’s failure to file missing tax returns and payment of any penalties.” The library board communicated regularly with the IRS, donors, vendors and the public throughout this process to ensure complete transparency.
“We are very pleased to be tax-exempt again,” said George Mettey, Holyoke Public Library board chairman, in the press release. “This achievement and the support of our generous donors allow us to continue our important work of providing citizens of all ages and abilities in the City of Holyoke and surrounding areas with equitable access to library materials, services, facilities, technology, current resources and programs to meet educational, informational, social, cultural and recreational needs.”
“We are committed to meeting all IRS requirements and ensuring our tax-exempt status is maintained,” Mettey concluded.
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