Discussion in 'Narconon' started by YouSeeNothing, Sep 1, 2012.
you guys rock
I just read the thread over at tipping point. Will be interesting to see what their tax-exempt status is considering that they are listed as tax-exempt with the state of Michigan! My friend told the Michigan clerk that he was trying to donate to Narconon and was having a problem determining their EIN as they are listed as non-profit but don't have an EIN that they can use for a write-0ff. Is it fraudulent to advertise yourself as a non-profit, claim non-profit status with the state and not have an EIN or non-profit status with the feds?!
I'll let you know if I get off perpetual hold with the IRS Tax Exempt folks before my lunch break ends. If not, I'll try again tomorrow.
Guessing you were on perma-hold yesterday.
Wrapped around the axle at work today, but FYI posted some info on the NN Int Group Exemption relationships I put together last night and brought in on a flash drive over on Tipping Point:
So our friends in Michigan, if I'm reading the dox correctly, are NOT a sub of Narconon Int'l., but still list themselves as a non-profit? Not seeing them listed could mean they are still waiting for their non-profit EIN (4 years and counting), they have a for-profit EIN that's not exposed to the general public, are operating on an owner's SS# or just ignoring our wog laws all together? I think it's important to remember that we verified it with the state of Michigan that Narconon Freedom Center of MI is a non-profit organization.
They may be operating as a 'nonprofit' in Michigan, without having an 'exempt' status from the IRS. Which would be donations to them could not be deducted from Federal Income Taxes, but possibly from State Taxes. But only if MI has their own 'nonprofit' definition that doesn't require 501(c)3 status from the IRS.
And the list I posted isn't all inclusive, I only used a partial list for that response. But NN Freedom Center's not in there at all, unless under a different name/EIN than they used back in 2008.
I think we really need to find their EIN number and determine if they are a non-profit with the IRS.
That's for 'Sales & Use' taxes, so if they're selling things they have to collect taxes on it.
It looks like they can have state 'nonprofit' status, so deductions can be taken on STATE taxes for donations without a Federal 501(c)3 exemption though. See:
If their telling people they can take a Federal deduction for donations then they're in trouble.
I believe you need Federal exemption also:
An EIN is required for exemption. A non-profit EIN should be available to the general public. Based on what you and I posted, I'm not sure if they are required to have a non-profit EIN to be tax exempt in Michigan. If the Michigan laws have the same requirements as the IRS then why don't they have an IRS-issued tax-exempt EIN? Why does EVERYTHING involved with this place have to be so difficult?!
They filed an amendment to their articles of incorporation in '08 declaring that they were a non-profit org as determined by the IRS. There are no other documents refuting that after 2008.
Bottom line, I think someone in Michigan is running a 'shell game' with these constantly shifting rehabs to create major confusion regarding who's who. This goes beyond the regular Narconon skimming for the Cof$, and I wouldn't be surprised of NN/ABLE is getting anything close to what they should be from NNFC. I really think it's going to take someone on the ground with a search warrant to get to the bottom of the Michigan mess.
That sounds like they used NN Int's 'Group Exemption', which they're not part of, and their 2008 Initial/Pending 990 to con the state into giving them nonprofit status, then let their IRS exemption (if it was ever approved) lapse.
If their non-profit status with feds is invalidated after speaking to the IRS, do you think a call/letter is in order to the Michigan corporations division fraud department or contacting someone like this: http://www.tax-whistleblower.com/?gclid=CJCAsb3KobICFQP0nAod_G4AOg
Check your PM
Some more news items that I don't think have been posted:
Narconon Freedom Center Actively Supports Governor Snyder’s Efforts to Reinvent MI
Narconon Freedom Center Named #1 Narconon Drug Rehabilitation Center In The World (This one's a hoot)
Narconon Looking at more property in Albion
Did they get #1 this year because NNTR and OK now are getting dropkicked around the legal arena and were removed from the list?
The article says they were the #1 Narconon rehab "out of 100 Narconon rehabs". They can't claim they are #1 out of all real rehabs, so, yes, I'm thinking they are positioning themselves as the go-to facility for Narconon. With everything going on at Arrowhead and GA it just looks like they are positioning this one as their next flagship facility. The PR piece I posted earlier talks about how this one is expanding.
They don't feel confident enough to say "the program HAS a 70% success rate" even in their own PR. Excellent! (And that was a few months ago, before the hammer landed on NNTR and Arrowhead acquired so much negative attention.)
You're so next!
Now tell me they're getting government money as part of a "faith-based initiative" or some such. No, really, I'm already getting a chubby...
Government money can be a problem for Narconon. Usually there's a stipulation that it can ONLY be spent on the program itself, which makes the automatic payment of 10% gross uplines an illegal move. At another Narconon, they added the 10% to salaries ... and then clawed the money back and sent it uplines. (Also an illegal move.)
Still trying to figure out how the money goes uplines. I'm stuck on Fees, Grants and Advertising/Marketing write-offs. Took a break this weekend and waiting with bated breath for Beard's update. I wish we had access to NFC's financials, as with everything else we've seen with this place, I'm sure they're just as fuxored. Knowing whether or not they are a legit non-profit with the IRS should help a lot in determining if we can get our hands on their numbers.
From looking at the Trois-Riveres finances, the money uplines seemed to be a couple of things:
1) Royalties for all LRH materials (which were 500K+ per year at Trois-Rivieres)
2) ABLE "missions". Higher echelon orgs (which for Narconon would generally be ABLE, I think) can send a "mission" to you org to inspect things, deliver briefings, yell at you randomly, etc. The org receiving the mission pays for the privilege. Towards the end of the period when Scientology missions (the other kind) were relatively independent, they had to host "finance missions" from Sea Orgers that would charge them a ridiculous amount of money to determine how they could gouge more money from the missions themselves.
It's a bit like how multinationals use internal pricing to control where profit is earned. Not sure if it is still the case but at one the transfer prices between Ford US and Ford Canada were such that Ford Canada technically made no money so all corporate taxes were paid on the side of the border with a lower tax rate.
The CoS wants 10% of the action so they set royalties to Narconon accordingly.
Just got off the phone with the IRS (finally!), and Narconon Freedom Center, Inc. EIN: 26-2990691 is NOT repeat NOT a Federal 501(c)3 "Exempt" organization. Apparently, based on the Michigan LARA system, they ARE a state level "Non-profit" organization. And they are not covered by the NN Int Group Exemption (GEN: 2595).
According to the lady at the IRS the "Non-profit" terminology is used at the state level, and "Exempt" is used by the Feds.
The question is, did they use that 2008 "Initial"/"Application Pending" Form 990 as the basis for getting state level non-profit status from Michigan?? If they did, someone with standing in Michigan may want to question that status.
Now to figure out if they are eligible for state exemption if not federally exempt...
It's possible. According to the info on the Michigan govt site a business can apply for state 'Non-profit' status withoug being a Federal 'Exempt' organization. The catch is state 'Non-profit' status is basically automatic if already approved as a Federal 'Exempt' organization. Which is why I say the question is, did NN FC get non-profit status by going through the whole state process, or by using that 2008 'Application Pending', 'Group Exemption 2595' Form 990? If the later, they could be in trouble.
From what I posted earlier from Mich. Gov. site, the list of requirements, #5 specifically, "Get an Employer Identification Number (EIN) for the nonprofit from the IRS by using Form SS-4.The IRS website discusses ways to obtain the EIN." to me, that suggests that state exemption is based on federal exemption. If they are no longer federally exempt. Kinda silly that this stuff isn't obvious on their site.
Not exactly. Except for sole proprietorships, and a few specialized exceptions, you have to have an EIN if you have employees. It has nothing to do be being exempt or not, although it's needed for the exempt/nonprofit status paperwork.
I'm assuming that they wouldn't give you their current EIN number?
It would still be 26-2990691. EIN's are only changed for some unusual circumstances. Switching between exempt/non-exempt status wouldn't normally be one of them. It's required for the Form 1023 request for exempt status, but it's not part of the information used to determine that status. At it's most basic, it's just used to keep track of employee income tax withholdings by the employer, regardless of exempt/non-exempt status.
From a tax perspective, going non-exempt means their Federal tax returns are no longer public, even if you have the EIN. Which may be a big part of why they went non-exempt. They didn't want anyone going over their returns with a fine tooth comb.
I was never sure they kept the same EIN. Understood that a corp was required to apply for a new EIN under certain conditions.
From the IRS:
You will be required to obtain a new EIN if any of the following statements are true.
A corporation receives a new charter from the secretary of state.
You are a subsidiary of a corporation using the parent's EIN or you become a subsidiary of a corporation.
You change to a partnership or a sole proprietorship.
A new corporation is created after a statutory merger.
I guess they don't meet any of those requirements.
Well, I suppose I should start looking to see what I can find in regards to their state exemption. Good work, BigBeard.
"You will be required to obtain a new EIN if any of the following statements are true.
A corporation receives a new charter from the secretary of state."
N/A - No change to the Michigan LARA info since they started.
"You are a subsidiary of a corporation using the parent's EIN or you become a subsidiary of a corporation."
N/A - Based on the one 990 they filed and the LARA info, they're not a subsidiary of anyone else.
"You change to a partnership or a sole proprietorship."
N/A - No such change shown in LARA.
"A new corporation is created after a statutory merger."
N/A - No merger indicated in LARA.
"I guess they don't meet any of those requirements."
Nope. So their EIN would still be the same as a non-exempt as it was as for their try at becoming exempt.
Got to admit I'd really love to see the response to their original 1023 requesting exempt status.
I'm also wondering how they fit with NN Int now, since they are NOT part of the GEN 2595 Group Exemption the rest of the NN Int operations fall under???
At any rate, that's my 'Good Deed' for the week. Now back to plodding through all those NN Int related 990's.
I believe we should be able to view that 1023 form.
I'm trying to find it now.
Narconon Freedom Center no longer shows up under a search on Foundation Center's site:
In other news:
Hey you beautiful fags, I brought you a snack. To keep up your energy for this thread of win
Beard, here's the request form:
Can be filled out online here:
Let me know if you need help.
EDIT: I don't see an image of these forms (Narconon) anywhere online. Surprised no one has requested them before and posted online.
If someone wants to go after the NN FC initial 1023, more power to them but I'm not sure what purpose it would serve at this point since exempt status was denied. Too be honest, I've spent way more time on the Michigan mess than I intended, and really want to get back to loading the data from the NN Int 990's into my spreadsheets. My guts telling me somewhere in there is the 'string' to pull to unravel the whole mess.
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