News Column

Suspension Freezes Hispanic Community Group

July 27, 2013

Two state agencies have suspended the corporate status of a nonprofit Latino group that has recently pushed for local school boards and cities to elect officials by geographic area.

The Latino Community Roundtable of Stanislaus County was put on suspended status Feb. 28 by the Secretary of State for not filing a "statement of information" on the organization. The Franchise Tax Board suspended the group's status as a nonprofit corporation July 1.

A tax board spokeswoman said the group was not in good standing because of the Secretary of State's action and it hadn't paid a $50 penalty to the state. There were indications from a Latino Roundtable official that it hadn't filed other paperwork on time.

"If you are suspended, it is illegal for you to be doing business," said Denise Azimi of the Franchise Tax Board. "If they want to get back in good standing, they can contact us and clear up the issue and be reinstated."

Losing the corporate status would diminish the Latino Roundtable's threats of legal action against local entities that continue with at-large elections. Corporations that are suspended can lose their tax-exempt status and lose ownership of their name, and are not allowed to represent themselves in court, Azimi said.

The group filed with the state as a 501(c)(4) nonprofit organization in 1997. According to its bylaws, it's an all-voluntary social welfare organization that strives to improve the political, social, educational and economic conditions for Latinos in Stanislaus County.

The group endorses candidates for local political offices and, in the past six months, raised its profile with letters to numerous school districts and cities charging their at-large elections violated state and federal voting laws.

In its letters in February, the group threatened to file lawsuits against school districts and Ceres if they did not immediately adopt elections by district.

Maggie Mejia, the group's president, said Friday she did not know the organization's corporate status was suspended until she was called by The Bee. She made some calls Friday and learned an old mailing address was on file with the state agencies, so the group had not received the suspension notices and other paperwork, she said.

Mejia noted the group missed a June 28 deadline for filing a form with the Franchise Tax Board.

She said she was getting the required applications from the agencies and would do what it takes to get the group reinstated. She planned to talk with board members next week about possibly halting political activities for now, but said a state official said it was OK to hold a charity backpack giveaway for school kids next week.

"I learned a lot today," she said, adding that other nonprofits have trouble keeping up with paperwork requirements. "This is why people don't volunteer for community organizations because of the negativity."

The Latino Roundtable did not file a "statement of information" with the Secretary of State that discloses the names of executive officers and directors, describes the type of business and includes other information.

Annual statements filed to IRS

The Roundtable has tax-exempt status from the Internal Revenue Service, which requires that it file annual financial statements. No revenue and expense data on the organization was available from GuideStar, a service that publishes online information about nonprofit groups.

Mejia said her group files annual Form 990 financial statements with the IRS. As of July 16, the IRS still listed the group as tax-exempt.

She said the Franchise Tax Board furnished her with an 18-page form Friday afternoon for seeking reinstatement of corporate status. She said the agency told her it can take up to 90 days for a decision, but she was looking into another option for expediting the process, she said.

The Roundtable collects annual membership dues of $30 for individuals, $50 for community groups and $100 for businesses. The group takes in roughly $9,000 a year, said Marco Moreno, who was recently appointed treasurer.

Moreno said he attended training on raising funds because the organization intends to start engaging in more professional fund-raising. The treasurer said Friday he wasn't aware of problems with the corporate status.

School districts such as Riverbank Unified, Stanislaus Union, Salida and Waterford are moving toward electing board members by geographic area, and the Ceres City Council decided Monday to put some type of district elections before voters, possibly in 2015.

Ceres Mayor Chris Vierra said Friday it wouldn't have made a difference if the council had known the group's corporate status had been suspended. The city was more concerned about national groups filing suit over the voting rights laws.

Council members took offense to the Roundtable's statement that at-large elections were nothing short of "an incumbent-protection voting scheme."

"We have a good relationship with the LCR and the Hispanic community, but that was a little disturbing," Vierra said. "We wonder if the voting public chooses not to go to district elections, are they still going to sue?"

Source: (c)2013 The Modesto Bee (Modesto, Calif.) Distributed by MCT Information Services

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