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Gouverneur Rescue Squad loses tax-exempt status

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GOUVERNEUR — The Internal Revenue Service has revoked the tax-exempt status of Gouverneur Volunteer Rescue Squad for failing to file returns for three consecutive years, but the emergency response organization hopes to have its nonprofit status reinstated retroactively.

“It’s something I have been working diligently to get straightened around,” said Mark A. Deavers, director of operations. “That has been my total priority.”

The loss of nonprofit status means that donations no longer are tax-exempt, that squad purchases would include sales tax and that its income most likely would be taxable.

“I do know they can do their thing, but they would have to do it in a different way,” said Craig C. Ballard, a member of St. Lawrence County’s Emergency Services Advisory Board.

Mr. Deavers, who started working for the squad earlier this year, said he was not sure who dropped the ball on the tax returns.

“I really don’t have an answer, except the board was worried about the wrong things,” he said.

Rose Jackson was the squad’s treasurer for at least one year during the disputed period, but she said she was unaware the taxes had not been filed.

“I have no idea. That’s my honest answer,” she said. “There’s a lot of things I probably should have known that were kept away.”

Mrs. Jackson would not be specific on who kept things from her or what they were. She is no longer with the squad.

The last tax return filed by the squad was for 2009. The return was signed by tax preparer David J. Hermann, Hermann Accounting Services, Watertown, who moved to North Carolina and is in semiretirement.

Mr. Hermann said he would have done the squad’s later returns if he had the information. In previous years, the squad had given him balance sheets, income statements and a general ledger to prepare the returns. But that changed.

“I never got the stuff. They had only provided me with bank statements and 1099s from insurance companies,” he said. “I was busy and I didn’t have time to push them.”

But Mrs. Jackson said the squad’s problems with the IRS are because of Mr. Hermann.

“We had an accountant that supposedly was doing our taxes,” she said. “We kept asking him and asking him. He never asked for anything.”

The squad lost financial data through a computer system upgrade and is reconstructing its books and records, Mr. Deavers said.

It has hired Crowley & Halloran CPAs, Watertown, to file the returns and conduct an audit. Any donations received will be held pending the return of the squad’s tax-exempt status, Mr. Deavers said.

The squad has had a number of board changes in recent years and had another on Wednesday, electing Tom Rusaw as president, Shawn Woods as vice president and Thomas Sharpe as treasurer.

“They made a whole bunch of changes to the bylaws to make sure this doesn’t happen again,” Mr. Deavers said. “The membership really did react very strongly.”

Mr. Rusaw had been interim treasurer since June, Mr. Deavers said.

“We knew the taxes were delinquent, but we thought we had extensions,” Mr. Deavers said.

Volunteer organizations can fall behind on keeping good records and paperwork requirements, Mr. Hermann said.

“It’s not terribly unusual because they’re changing officers all the time,” he said. “They need somebody on their end that’s going to provide some kind of continuity. I can’t make magic.”

The squad’s problems come at a time when it was starting to rebuild, with 36 members and nine paid staff members.

“It’s really unfortunate because it’s a dedicated group of both volunteers and paid staff,” Mr. Deavers said. “We have to be responsible and accountable. We will be.”

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