Tax status of Kåmalen Karidåt remains unclear

IN THE DARK: The Kåmalen Karidåt building in Hagåtña is pictured. The Concerned Catholics of Guam group has suggested that the Department of Revenue and Taxation investigate the nonprofit. David Castro/The Guam Daily Post

A watchdog group suggested the Department of Revenue and Taxation should be investigating the nonprofit Kåmalen Karidåt Inc., which hasn't filed annual public disclosures of donations received and expenses made – for more than 20 years.

Instead of conducting an investigation, Rev and Tax Director John Camacho wrote on Tuesday to Rev. Mike Crisostomo, who was part of the leadership of the nonprofit, stating Kåmalen Karidåt is a thrift shop that is considered "an integrated auxiliary" of a church.

"Therefore, Kåmalen Karidåt is not required to file Form 990 returns," the director wrote to Crisostomo.

Camacho wrote his opinion based on the premise that Kåmalen Karidåt meets the Section 501(a) tax exemption – for a church and its "integrated auxiliary" – under the federal Internal Revenue Code, which Guam mirrors.

However, Rev and Tax's own listing of nonprofits shows Kåmalen Karidåt as a different class – a 501(c)(3) tax-exempt organization under the federal tax code, which requires it to meet yearly financial disclosures using Form 990.

If an organization fails to file Form 990 for three years in a row, its tax-exempt status is automatically revoked, according to the U.S. Internal Revenue Service.

This form allows tax authorities and the general public to evaluate a nonprofit's operations and it includes information on the nonprofit's mission, programs and finances, according to the IRS.

The watchdog Concerned Catholics of Guam disagrees with the Rev and Tax director's opinion, based on information from Crisostomo, that Kåmalen is simply "a thrift shop."

$200K in the bank

Based on a preliminary inspection of the nonprofit's finances recently, Kåmalen Karidåt had about $200,000 in bank accounts and its records showed funds were used to buy cars under the leadership of then-Archbishop Anthony Apuron, the watchdog group stated.

Kåmalen Karidåt cannot claim to be an integrated auxiliary of a church because it doesn't qualify per IRS definition, CCOG President David Sablan said.

"Since (Kåmalen Karidåt) has not filed a Form 990 for 23 years as a 501(c)(3) organization, the Department of Revenue and Taxation should be investigating the activities of this nonprofit corporation," Sablan said. "They should question the board members, look at their financial records and then decide if they need to refer Kåmalen Karidåt to the attorney general's office or other appropriate government agency for further investigation."

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