Hundreds Of Nonprofits At Risk Of Having Their Tax Debt Sold—Even Though Many Should Likely Be Tax Exempt
Advocates have plenty of examples to point to when describing the lien sale process running amok. By their tally, 89 properties with community uses had their tax debt sold in 2016. Among them was Grace Baptist Church in Bedford-Stuyvesant, which sold last year to cover wrongfully levied tax bills, according to reporting by Urban Omnibus. The Al-Muneer Foundation, a mosque and community center, in Jamaica, Queens had its wrongfully issued tax debt sold in 2014 and had to fight to get the tax erased.
A church's failure to pay taxes or file for an exemption for one of three neighboring lots that make up the Imani Community Garden in Crown Heights led to its tax debt being sold in 2004. The affected lot is in the middle of the garden and contains a decades-old willow tree. In 2015, BNY Mellon's trust foreclosed on the debt, and a developer bought it at private auction. The new owner fenced the lot off from the other two sides of the garden, and is now planning to build an apartment building there, according to Buildings Department records.
Aging nonprofit administrators, dwindling church congregations, decentralized dioceses, and transient volunteer pools can all contribute to nonprofits missing the significance of bills or failing to file paperwork, according to people familiar with the issue.
"I’ve heard from some folks who are like, 'Why can’t some nonprofits fill out some forms?'" said East Side Councilman Ben Kallos, who lead the sign-on effort. "If this goes into the lien sale, no bank is going to say, 'Oh you don’t need to pay us back, you just need to fill out this form with the city.' The city should be reaching out proactively to folks."