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Red and Black obtains status for tax-exempt contributions

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The Greater Watertown Red and Black Inc., the corporation that manages the nation’s oldest semi-professional football team, has secured 501(c)(3) nonprofit status from the Internal Revenue Service and can now begin receiving tax-exempt donations from the community.

Tuesday afternoon, Steven L. Weed, vice president of the organization’s board of directors, sent Watertown Daily Times Managing Editor Robert D. Gorman a copy of an IRS letter dated Friday approving the status.

In a statement accompanying the letter from the IRS, Mr. Weed wrote, “We are in the heart of our fund raising season and it would be greatly appreciated if this misconception could be cleared up immediately so that we are recognized as a legitimate not-for-profit that way going forward we don’t have to answer any wrong perceptions regarding our 501(c)(3) status...as portrayed erroneously over the weekend.”

A Times story Sunday reported the team had lost its nonprofit status with the IRS as a result of failing to file at least three consecutive years of series-990 returns — what a nonprofit files instead of an income tax return.

The information was confirmed by a call placed to the IRS on April 23.

“We have no record that the organization is tax-exempt by virtue of an approved application,” said Kenneth Gerding, an IRS official who answered the agency’s nonprofit phone line on that date.

According to the IRS, the organization had its status revoked May 15, 2010.

The information about the organization’s financial and legal standing was brought to the attention of the Times by Brian L. Williams, the Red and Black’s former quarterback and a Watertown accountant who was asked by the team’s head coach, general manager and president, George Ashcraft, to help obtain the 501(c)(3) status early last year.

To prepare the IRS application, Mr. Williams analyzed 44 months of the organization’s financial reports, noting a number of poor accounting practices, including a large quantity of checks made to cash and a personal loan paid with the team’s money.

The letter from the IRS forwarded to the Times by Mr. Weed lists the effective date of the organization’s reinstatement as a tax-exempt organization as of April 18, 2012.

“Your effective date of exemption, as shown in the heading of this letter, is the postmark date of your application,” an addendum to the letter reads.

That’s how Mr. Williams knows it was the application he submitted. He said he prepared the application and submitted it to the IRS on April 18.

He then brought his concerns about the organization’s accounting practices to its board of directors in October and was lambasted by a defensive Mr. Ashcraft before receiving three letters from Watertown attorney James A. Burrows requesting he return all corporate documents and not discuss his discoveries.

Mr. Williams complied for a time until a former Red and Black coach forwarded Mr. Williams’s written report to the Times.

Reacting to the news the organization had been reinstated as a legitimate nonprofit organization, Mr. Williams said he was happy for the organization — he just wanted to help the team get to a point where it could be self-sustaining — but there were still several questions left unanswered about the organization’s accounting procedures.

Mr. Williams said he was not paid for the accounting work he did for the organization and he put “a lot of hard work into obtaining that 501(c)(3).”

But Mr. Williams said he doubts his contributions will be recognized.

“I’m the one person they say shouldn’t be trusted — but I’m the one who got the status for them,” he said.

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