The Oak Forest Homeowners Association (OFHA) is back in good graces with the IRS.
The volunteer-led OFHA, which helps enforce deed restrictions and operates for the betterment of the historic Northwest Houston neighborhood, had its nonprofit tax-exempt status reinstated by the IRS in May. The organization did not file its required financial reports from 2014-18 and as a result had its tax-exempt status revoked in 2017.
After catching up on its tax filings for those years, and submitting a Form 990 for 2019, the OFHA Board of Directors submitted a reinstatement application earlier this year. In a May 14 letter to the OFHA, which provided a copy to The Leader, the IRS said the organization’s tax-exempt status had been reinstated, retroactively effective from the date of revocation.
“Sincere thanks to former and current board members who spent countless hours working diligently together to return the OFHA’s financials to normal operating status,” the OFHA said in a statement.
The OFHA, which serves more than 5,000 homes in Oak Forest, is a 501(c)(4) nonprofit as opposed to a charitable 501(c)(3) nonprofit. That means donations to the organization are not tax deductible.
The OFHA previously had its tax-exempt status revoked in 2010 and retroactively reinstated a year later, according to information on the IRS website.
Current OFHA board members said they discovered in February 2019 that its tax-exempt status had again been revoked because it had not been filing 990s, which are required of nonprofit organizations. In a reasonable cause statement shared with residents last September, the OFHA attributed the failure to file to bookkeeping deficiencies, an address change that prevented it from receiving notifications from the IRS and an operating budget that ballooned from less than $50,000 in early 2013 to about $300,000 later that year, when the OFHA enlisted SEAL Security Services to patrol the neighborhood. The largest the budget for a nonprofit, the more extensive its 990 forms must be.
Despite the oversight from 2014-18, OFHA board members said last September that all the organization’s money during those years was accounted for.
“We reviewed bank records going back as many years as we have records, hired a bookkeeper and filed proper documentation with the IRS for the missing years as a well as a timely 2019 return,” the OFHA said in its statement. “… The board, working with legal counsel and a third-party accounting professional, developed a fiscal policy to provide to future boards and to prevent any oversight in the future.”