Wednesday, July 14, 2010

La Habra Heights Improvement Association’s Tax Returns Suggest Fraud

Contributions Not Tax Exempt!

La Habra Heights, CA - The tax filing status of La Habra Heights Improvement Association has recently come into question. LHHIA is a local organization that is established to unite residents & promotes development and welfare of the community. The group solicits contributions from residents & local businesses, by claiming it is a charitable 501(c) 3 non-profit, and that contributions are tax deductible. However, the IRS Publication 78, a list of recognized 501(c) 3 charities, does not include the La Habra Heights Improvement Association as a charitable organization. Only contributions to organizations recognized by the IRS are tax deductible.

In addition, the Improvement Association's publicly available 990 Tax Filings for 2006, 2007, & 2008, signed "under penalty of perjury" by Treasurer Jeffrey Heintz, state that the Association is a 501(c)4 non-profit, not a 501(c)3.

According to documents published by the Internal Revenue Service, contribu­tions to 501(c)(4) organizations generally are not deductible as charitable contributions for federal income tax purposes. Also, the organization may be required to disclose that contributions are not deductible when it solicits contributions

A 501(c)4, however, can be politically active. Examples of 501(c)4 organizations include employee unions, civic leagues and political action committees.

Improvement Association President Pam McVicar said that the 990 Filings were "errors". The office of Joe Mercile, accountant for the Improvement Association, was contacted in an effort to confirm the LLHIA filing status. At press time, calls had not been returned.

At the LHHIA general membership meeting in June 2009, held in at City Hall, concerns were raised over the security of members’ personal financial information. Primarily, in light of the arrest of the Improvement Association Vice President in April of 2009 on 144 charges, including fraud and identity theft. The Board attempted to quell the concerns by touting the professional accountant they used, Joe Mericle, and the fact that the Treasurer, Jeffrey Heintz, was a (former) police officer.

Next antic under investigation; LHHIA commits 1 to 1576 counts of mail fraud.

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