Oorah Scores Clear Victory for Children on Tax Appeal against Town of Jefferson

courtcaseIn the culmination of a contentious three-year battle between national nonprofit Oorah and the Town of Jefferson in Schoharie County, New York, the Appellate Division of the Supreme Court affirmed the organization’s charitable standing in a ruling yesterday that firmly established the town did not have jurisdiction to deny or call the nonprofit’s tax-exempt status into question. The court’s ruling forces the town to recognize the charity’s property, a former ski lodge turned children’s camp, used by Oorah in consonance with the organization’s mission, as tax-exempt.

“The case revealed that the town had illegally denied Oorah its religious rights under the influence and animosity of former Town Supervisor Dan Singletary,” the organization said today. “This vindictive abuse of power cost the local taxpayers many thousands of dollars in legal fees to fight a vendetta with little to no chance of victory for the town.”

The unanimous Appellate Division’s decisionvindicates Oorah’s persistence in pursuing the case to a victorious conclusion, despite extreme effort on the town’s part to deny the nonprofit its rightful tax exemption. “We were confident in our decision to fight this injustice to the very end,” said Rabbi Avraham Krawiec, director of the Oorah camp, TheZone. “Despite the years of unbelievable mistreatment we faced from the town leadership, this was a mission we accepted for the sake of the children who enjoy our camp each year.”

Statutory law that the court’s ruling is based on unequivocally states that “a property owner seeking a real property tax exemption which demonstrates that it is a not-for-profit entity whose tax-exempt status has been recognized by the Internal Revenue Service and whose property is used solely for [charitable] purposes has made a presumptive showing of entitlement to [the] exemption.” The court’s ruling clearly delineates both that Oorah is a legitimate 501(c)3 non-profit organization, as recognized by the IRS, and that the property is used for charitable purposes, “among other things, operating a summer camp ‘to provide religious, educational, social and moral enrichment and improvement,’ … Accordingly, to the extent that Supreme Court determined that certain of the subject properties were not entitled to the exemption,” the decision states, “this was error.”

With no basis for denying Oorah its tax exemption, the town was, in effect, attempting to extract millions of dollars from its charity beneficiaries.

“The values that are expressed in the New York State statute which provides for mandatory tax exemptions for organizations like Oorah is based on a legislative finding that charitable children’s camps and similar properties have such a strong community value that we’ve made a social decision to protect them from taxes so they can thrive,” said Oorah’s attorney, John Privitera. “TheTown of Jefferson was illegally trying to impair the charitable mission of Oorah in developing the property. This landmark decision affirms the values we’ve chosen as a society not to take donated dollars from a charity in the form of property taxes.”

“The mistreatment Oorah faced in Jefferson stands in stark contrast to the fair, non-discriminatory, working relationship the organization enjoys with the neighboring town of Gilboa, where a second tax-exempt camp for children is located,” the organization said. Oorah gives an annual donation to Gilboa in appreciation of the services and amenities the town provides the camp.

“This decision is a victory against municipalities that seek to throttle charities and organizations they don’t like or follow religions they don’t embrace,” said Privitera. “By trying to impose the shackles of taxes upon a charitable organization, the governing body of Jefferson sought to challenge the very validity and values of Oorah and limit them from fulfilling their vision and mission, a freedom explicitly granted them by law.”

The town waged war against Oorah from the day the organization bought the former ski lodge property, says the organization, beginning with Singletary refusing to process its building permit applications in 2010, despite Oorah’s good faith efforts to comply with all the township’s demands. Singletary was voted out of office in November. [TLS]

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  1. whats the other side of the story. other than antisemitism is there any basis to call oorah a for profit org, their IRS 501c3 status not withstanding. is it wrong to think that a high marketing venture as theirs seems to be for profit. that said, i wish them much success in their endeavors to help acheinu bnei yisroel and may Rav Chaim Mintz Shli”a be blessed with kul tuv

  2. #1

    There is one primary definition for what is and is not a non-profit in American law. A non-profit is allowed to make a “profit” on its business related activities. For example, most charitable foundations have investments and there are numerous non-profits that own commercial property which is rented out. However, all profits must then be put back into the non-profit to be used for the operation of the non-proft and can not be taken out and be given to any “owners” or “shareholders” as profit. On a related note, if a non-profit closes, its assets must be given to another non-profit and can not be taken by the people running it.

    Under this definition Oorah most definitely is a non-profit, albeit one with a very effective fundraising and marketing strategy.

  3. to former cityyungerman
    You’re only partially right
    The IRS has changed the name nonprofit to exempt precisely to correct the notion that you aren;t allowed to make profit
    Your mistake though is that an exempt organization is allowed to make money in other businesses without paying tax.
    Owning property has its own special tax rules based on the mortgage
    Foundations pay taxes on investment interest and dividends
    Oorah probably pays tax on any profit from Cucumber regardless of any money it transfers back to Oorah
    Bottom line, no matter what the business is it is not allowed by the IRS to have an unfair advantage based on its affiliation with an exempt organization
    See IRS PUB 598 dealing with UBIT
    (Unrelated Business Income Tax)

  4. This was heard by five justices of the Court. I find it very telling that a unanimous decision was handed down by FIVE justices.

    That indicates to me that the actions of the TOwn of Jefferson were baselss

  5. to CPA

    I was not discussing whether Oorah has to pay taxes on its business activities and I never claimed that they are exempt from paying taxes on those activities. I was addressing the first comment that due to Oorah’s business style marketing strategies could there be a reason to claim that Oorah as a whole is not a non-profit regardless of IRS status, to which the answer is no as per my explanation.

    As to the actual lawsuit, I am sure the town attempted to claim that the camp is a business activity rather than an educational activity and therefore should be taxed as a business, and argument which the court disagreed with for obvious reasons.

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