Philadelphia's plan to bring in new revenue by requiring nonprofits and charities to justify their tax-exempt status is not receiving a warm reception.
After the city this month sent out letters detailing the requirements, scores of churches called City Council members to complain. The president of the Philadelphia Black Clergy threatened a lawsuit. Two Council members introduced bills looking to relieve the burden.
"They don't know where their documents are," said Councilman David Oh, who on Thursday introduced a bill to delay the March 31 deadline for submitting documents on tax-exempt status. "People are alarmed."
The new reporting is required under a law signed by Mayor Nutter in 2013 meant to address a concern that some properties with tax exemptions are not being entirely used for nonprofit purposes.
To begin assessing properties, the city sent letters to each of Philadelphia's 6,500 lots registered to nonprofits. Those nonprofits were asked to provide several documents, including articles of incorporation, a statement of fund-raising activities, and a copy of the property deed, by March 31.
Oh introduced a bill Thursday to push the deadline to June 1. Councilwoman Jannie L. Blackwell introduced a bill that would do away with the filing requirement.
Mark McDonald, Nutter's spokesman, said the requirements should not be onerous, as many of the documents are the ones required to receive 501(c)3 nonprofit status from the federal government.
Also, groups that have called the Office of Property Assessment are being told that sending their 501(c)3 documentation will suffice, McDonald said. Any group without 501(c)3 status will be given a 30-day extension to sort out those issues with the IRS, he added.
Terrence Griffith, president of the Philadelphia Black Clergy, called the new requirements "intrusive." He said his group was prepared to sue if the city does not change course.
"Clergy who do not know about it, when they find out, you will have a revolt in Philly," he said. "We can guarantee that."