Tax-exempt Geek Group hit with huge tax bill

Non-profit hackerspace The Geek Group has been hit with a hefty tax bill despite their tax-exempt status. We featured a boom camera built by the organization back in November. It is the goal of The Geek Group to fulfill the thirst to explore and create by providing facilities, peer group, and camaraderie that make knowledge and learning not only acceptable, but desirable. In the video after the break you can hear a bit about the organization’s role in servicing donated computers and putting them out into the community, as well as its role in education through groups like the Boy Scouts of America.

This is all done without the goal for profit and accordingly they have attained 501(c)(3) status with the federal government (we’ve seen their 990 forms stating this). To the best of our knowledge this doesn’t mean that they don’t need to pay property taxes, but it does make property taxes ridiculously low (we’ve heard of one cent per acre for non-profit land holdings before). That’s why it comes as quite a surprise when the township slaps a sticker on the doors giving notice of seizure and demanding payment for $47,652.78 in back taxes or the assets will be auctioned off. The entire story, from The Geek Group’s point of view, unfolds in a video of the quarterly Board of Directors meeting from last Saturday.

We’re hoping this is just a mistake and can be remedied. That being said, it’s not easy to run this type of operation. It’s unfortunate that the Board of Directors needs to deal with a tax battle in addition to fulfilling the mission of the organization. Good luck to them in navigating the road ahead.

[Thanks Jeremy]

Comments

  1. BiOzZ says:
  2. Mlohkcots says:

    The videos are all you need to see what’s going on.

    http://www.youtube.com/user/Physicsduck

    http://www.youtube.com/profile?user=thegeekgroup

    Watch and think objectively.

  3. Pyrodogg says:

    Listen to question (from the right), then answer from apparent lawyer (on the left).

    Regardless of how you classify this BS, it started back in September 2009. The Geek Group has long missed every bit of legal standing they have to fight this in the judicial system. At least, that’s what I get out of the lawyers response.

    If they wanted to get things done right, they should have had filed the injunction on day 1, barring that they should have filed appeals as soon as they were notified. Now all they have is pandering to the public, which will get them nowhere.

    It appears at this point they are either screwed into paying the back “taxes” or getting whatever tax agencies to admit they made a mistake (which won’t happen without a court order, which they can no longer file for.)

    TLDR This happened over 6 months ago. Even if it’s BS they missed too many deadlines, now they’re screwed.

  4. Matt says:

    My understanding is that they weren’t aware of the change of their tax status until the time limit on judicial appeals had passed, because of backdated taxes.

    As the story in the videos goes, the Kalamazoo township claims that they sent a single letter (not registered mail) when they decided to tax the geek group, who they had previously accepted as a registered non-profit org. A letter which the Group says it did not receive. Then no further communication was attempted until they put notices on the building saying they were going to seize and auction it off.

    @Pyrodog – maybe I missed it, do you have any reason to believe the deadlines had not passed by Sept 2009?

  5. bothersaidpooh says:

    This is another example of the Govt crushing innovation and creativity so they can outsource everything to our favourite Far Eastern place.

    Fight this to the end guys, you have my vote and any money I can spare for legal solutions.

    have notified as many people as I can of this, to see if anything can be done. this is nothing more or less than theft and blackmail by the Govt.

    What with the chemical/etc restrictions and stupid EU “recycling” laws that stop people salvaging broken electronics any more, its a miracle anything gets done.

    email me on anarchy2012 at hotmail uk

  6. rumple says:

    One word-countersuit. Are any of your associates from Canada or Mexico? If so you can claim this to be “tantamount to dispropriation” under Nafta and just decide how many zeros to add to your suit.

  7. carpevino says:

    I wouldn’t be surprised if those notices were stuffed under a couch somewhere. Chris is notoriously anti-government and often tossed letters/notices from collectors aside with a, “We don’t have to worry about that… screw them,” comment. The group has a history of evictions and a pretty bad rep in the community. Most people won’t go near Chris with a ten-foot pole. He is completely unstable.

    Karma bombs are glorious things.

  8. Anon says:

    >>Original Anon

    I used to go to this place and help out all the time. The problem is that it’s helter-skelter in this place, it’s been that way since day 0…
    A sheer lack of effort in organization surly played a role here.

  9. Orv says:

    To those of you who think this is some kind of specific witch hunt: It’s not. In Michigan even non-profits have to pay “personal property” tax on equipment and inventory. This is not the first organization to run into this; they’re not being singled out, they were just (at best) ignorant of the law.

    Many organizations deal with this by selling off their excess junk before tax time every year, to minimize their tax bill.

  10. docbill says:

    Orv, I am impressed how you manage to sound well informed, without doing even the minimal research. Check-out the Michigan Nonprofit Association for information on property taxes. Geek Group is qualified to be completely tax exempt. Now that they have a lawyer, I’m sure they will be in the future. The main problem is the back taxes. Since the case was dismissed with prejudice for filing after the deadline, it can only be resolved by paying the back taxes and looking for a legislative solution.

    Here is a link to more information about taxes to non-profit organizations in Michigan:

    http://www.mnaonline.org/buzz0904.asp

  11. therian says:

    @ jeditalian
    when he was asked a serious question why we spending shitload of cash instead of legalizing it, he turn question into the joke and laugh it off. search youtube it must be there

  12. ZP says:

    They are delinquent in tax payment. Tax-exempt in state and federal do not exempt from all taxes just greatly reduce it. Besides, tax laws change as governments try to pay for promised services and state employees. Around this tax-audits for everyone whom made a mistake is being sent. They make mistakes and so do people. Is this Geek Group trying to profit, you bet. Is Geek Group in the wrong here, maybe. Is the government wrong in auditing them if there is a question or problem in their taxes, no. Is Geek Group going to be judged harshly for trying to profit on this, most likely.

  13. IsotopeJ says:

    The Geek Group is learning two great lessons here:

    1. Try your hardest to do right and you’ll only be punished. There’s “by the book” then there’s “how it’s done”. Larger companies have learned how to navigate the sea of bureaucracy, but it’s growing pains for the new small business or even worse: non profit organization.

    2. When you do anything part-time or by volunteer work, you’re going to miss important things like deadlines.

    I hope all the best of luck to this group. They’ll get through this and have valuable experience in the end, but it’ll be an arduous road in the meantime.

  14. Jake says:

    Someone needs to get the tax assessors personal phone numbers and post them here so people can call and lodge their protest against this crime. Ruth Blake is married to Robert L. Blake. I haven’t found a phone number for either yet, but working on it. Haven’t checked on the other lady yet either.

  15. Crash2Parties says:

    The second I saw mention of them supporting the Boy Scouts of America – I lost all feeling of wanting to help or support. The BSOA is a quasi-religious, quasi-military politically conservative organization that has been outspoken in its homophobia and as has recently been discovered in the Oregon court case, may be as institutionally pedophilic as the Vatican. So, no sympathy here for any institution that supports them. There are other groups that help the underpriviledged and provide PC’s and net access and they will be getting a donation from me today.

  16. D- says:

    Wow a new low for comments on hackaday, party politics. IMO general discussion of politics is a valid thing when there is legislation pending that would effect hackers and DIY. Party politics is a dead end street, hopefully hackaday will discourage it to the extent it can, when allowing anonymity.

    Like comments here we can only take what the group’s BOD has to say at face value. I do suspect there’s a strong chance of shenanigans on the pat of the city on for the behalf of friends, and the fact that the property would more likely benefit more folks locally if it where own by a for profit enterprise paying taxes AND salary/wages.

    On the part of the group I suspect the mail was ash canned unopened on the basis of the return address and ignorance of a volunteer. A volunteer who had heard we are a non-profit, so we don’t pay taxes too many times, so they didn’t think they had to bother with it. Yes speculation on my part, but based on what I have members of other volunteer administrated groups do. Evidently no one was paying attention to the legal notices in the official city newspaper. Where most local governments post who are arrears in their taxes and how much. I’m guessing the stated membership numbers reflect how many have registered at their web page, not the number of persons able to use the facility regularly. In the event that the register members may be actually learning from using the web page, I can’t hardly say the numbers are misleading

  17. FormerScout says:

    Crash2Parties, your attacks on the BSA are unwarranted. They are a private group that accepts all religions and politics into its ranks. Claiming ‘institutional pedophilia’ is just another political tactic. They aren’t perfect, but they aren’t fatally flawed.

    If BSA troops visited the Geek Group, they were there for education and to see the interesting things that can be done with technology. How is that religious? How is that political? How is that homophobic? It isn’t. It is educational, and there is nothing wrong with supporting education.

  18. Al says:

    Demand free taxes for 20 years just because. In Ohio FedEx (world headquarters) has a tax free location in the city of Green Ohio (between Akron and Canton). Just because. Politicians do that for rich people (orphans puppy dogs babys etc.) they think will help them out I think they call it corruption and bribery but no one in Ohio has been convicted yet so the lawyers got an angle on it and must have a new name for the old BS. As far as dealing with the low level jokers you will get nowhere. That kind of privilege comes from the top. Zoning health and taxing authorities are not flexible in any form. So If you can make like a orphaned baby with a puppy dog you are in there or else if you got 10 billion $$ you wont have to pay otherwise your screwed.

  19. Al says:

    State is the usual authority for special tax status like no tax church property. Solder in gods workshop pilgrim. Ask around but back tax will not go away if you figure that out let us know!

  20. xrazorwirex says:

    “politics is a dead end street,”

    Politics is just arguing about how to use the monopoly on violence that just hurts everyone in the long run.

    I would encourage this group to NOT pay these taxes and stand their ground, possibly even pack up and leave to another town that won’t harass them and try to steal their property.

  21. tom says:

    im in kalamazoo, these guys helped me out a whole lot with my computer problem, letting me avoid sending it in to sony to have some retard charge me 100 dollars just to figure out the problem. i know that one of their buildings moved into a big warehouse place and i hope that was it, not that they are getting shut down.

  22. hayden hawke says:

    I can’t believe taxes in the states. It’s just so ridiculous. And the politics, its a rat race.

  23. Can you imagine the power of the government if you won’t follow their order? They will confiscate all they have if they won’t pay taxes. A non-profit institution now being disturbed for not paying taxes. What a shame! I think they are being eaten by the word “money”.

  24. no surprise here says:

    If this non-profit organization obsessed over stealing oil from Iraq on humanitarian grounds, or writing reports on how to sell criminal agendas to the public, this would never have happened. Taxes are meant to float scumbags, and sink good people. Proof is all around you in this crumbling, rat hole society of ours.

    How did this turn out???

  25. Superman says:

    I’m a member of the Geek Group and volunteer as well. They have found a new home in Grand Rapids at a facility just about perfect for their aspect. High Voltage lab, Vehicular Sciences lab, Computer lab, and to many others to state. As far as I’ve been told this was dealt with and that they did pretty much the wave a nonprofit letter and got off scott-free.. which is a good thing. A learning experience for all involved. They are on facebook and youtube as well. Go ahead and check them out. Tell em Superman sent you :)

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