By Marivir R. Montebon
New York City – One month into the Philippine Independence Day parade in early June, organizers of the annual Filipino celebration here have raised money to make it happen despite an impending Supreme Court case on transparency and accountability.
Juliet Payabyab, one of the two petitioners against the Philippine Independence Day Council (PIDCI), recently cried foul on PIDCI’s alleged continued lack of honesty in its fundraising activities. She told OSM! online magazine that the solicitation letter for its souvenir program published an ambiguous statement which states “All donations are tax-deductible to the extent provided by US law.”
“Isn’t that false and misleading? Even the IRS website indicated that PIDCI is no longer a tax-exempt organization as of February 15, 2016 so donations are not tax-exempt,” said Payabyab in an interview.
PIDCI president Ner Martinez was sought for his comment, but has not responded as of press time.
Payabyab and her group the United Mindoro International and the Philippine Community Center Services for the Aging are suing PIDCI for financial accountability and failure of elections due to alleged lack of transparency. The case is heard by Judge Barbara Jaffe.
PIDCI’s tax-exempt status was automatically revoked as of February 15, 2016 for failure to file its Form 990 return or notice for three consecutive years. According to the IRS website, “a 501(c)(3) organization that is automatically revoked is not eligible to receive tax-deductible contributions. It will be deleted from Exempt Organizations Select Check (Pub 78 database) and the IRS Business Master File extract will no longer indicate that the organization is eligible to receive tax-deductible contributions. Tax-deductible contributions may be made to an organization whose tax-exempt status is subsequently reinstated.”
In relation to this, Karen Wu, a lawyer for nonprofit organizations, noted that during the period in which an organization’s 501(c)(3) tax-exempt status is revoked, an organization should not state affirmatively in its public communications that donations are tax-deductible.
“Statements that donations are tax-deductible to the extent allowed by law should not be used in solicitations during any revoked period,” Wu explained.
Payabyab criticized PIDCI leadership for the continued disregard of transparency and accountability, the very issues that have dragged them to court. “I want donors to be warned that they are not going to enjoy tax exemptions when donating to PIDCI,” she said.
The National Council for Non-Profits said that non-profits whose tax-exempt status are revoked must be transparent about it.
“The nonprofit’s website, and all other communications, should be transparent about the fact that the organization is not tax-exempt. Remove any messages that state that donations to the organization are tax-deductible to the donor, or that describe the organization as tax-exempt.”
Meanwhile, the Dinagyang and Bacolod Maskara contingents from the Philippines are all set to join the parade on June 3 this year in celebration of the 120th independence day of the Philippines, the first republic in Asia. The cultural fair is traditionally held on Madison Avenue which is by far the biggest overseas Independence Day celebration of Filipinos.#