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The director of Circle of Angels Initiative Inc. recently found out her organization, which she believed since 1999 was a 501(c)(3) tax-exempt charity, is in fact not formally considered as such and said she has taken the proper steps to change that.

The Circle of Angels, according to its website, is a charitable, faith-based, community initiative incorporated 1999 with a mission to eliminate poverty through community organizing, mentoring and entrepreneurship.

Roseanna Vogt mistakenly believed her organization was formally registered with the Internal Revenue Service as a 501(c)(3) tax-exempt organization because she filed Form 990-N on the IRS website. Form 990-N is an electronic form that most small tax-exempt organizations whose annual gross receipts are normally $50,000 or less are required to file, according to the IRS website.

Michael Schlein, investigator with the Maryland Office of the Secretary of State, said organizations file 990-Ns for various reasons, but “filing a 990-N form doesn’t make you a 501(c)(3).”

Being a 501(c)(3) indicates that an organization is recognized by the IRS as a tax-exempt organization, Schlein said, and typically people tend to give to these groups because contributions are tax deductible.

Schlein said Circle of Angels filed a 990-N form Feb. 13 with the office as an organization exempt from registering as a charitable organization because it did not receive more than $25,000 in charitable contributions in the most recent fiscal year. On that same form, Vogt indicated that the organization was not a 501(c)(3), which she said was a mistake.

Organizations may be considered and can operate as a 501(c)(3) without actually filing the formal paperwork. An organization may be considered as such for up to 15 months after being created, with a 12-month extension.

The Internal Revenue Service Tax Exempt and Government Entities Exempt Organizations document on the IRS website states that most organizations have to file a Form 1023 by the end of the 15th month after creation, with a 12-month extension available. Any organization that files an application before the deadline will be recognized as tax exempt under the 501(c)(3) section of the IRC from the date of its creation, according to the document. Organizations that file after the deadline may be recognized as tax exempt from the date of the application or may also request exemption retroactive as of the date of creation.

Schlein said in this situation, corrective action will be taken, which includes ensuring the organization is not identifying itself as a 501(c)(3) until that status is formally obtained. On the Circle of Angels website, information indicating the organization is a 501(c)(3) has been removed.

Vogt said earlier this month that she has filed with the IRS as a 501(c)(3) tax-exempt organization.

Family disappointed by struggling program

Last winter, Vogt approached The Calvert Recorder about writing an article on the Circle of Angels’ new program, Mutual Aid Housing. Vogt said the program was formed to raise money to buy back foreclosed homes from banks through community donations.

The Circle of Angels planned to use the money to keep the original families living in their homes or to work with the families to help them find new affordable housing. In an article published Jan. 4, Vogt said, “I know it can be done” through donations from generous individuals and groups, including a donor email list of 2,000 names, dozens of churches and numerous partnering agencies.

The organization’s website states that “people are still in their homes today because of the Circle of Angels.” In a phone interview last month, Vogt said the organization has not been successful in helping people keep their homes and she is “still working on getting [the Mutual Aid Housing program] going.” She said the program has helped people temporarily by encouraging them to stay in their homes until actual eviction and by giving them someone to talk to.

Vogt said the thought for the Mutual Aid Housing program is to place people into homes that are affordable to them after Circle of Angels purchases the homes in foreclosure, “so we’re working on a contract with people who would help us invest with regard to purchasing the home.”

In the January article, Vogt said she planned to help save Susan Prentice’s home. Vogt said she had been working with Prentice since late spring of 2011 to purchase her house and keep her in it. At that time, she said, the Circle of Angels was negotiating with the bank over the home’s value.

In January, Prentice was evicted from her home.

“To look at my house now, I cry,” Prentice said recently. “I know my house wasn’t a mansion, but it was my home. I feel I’ve just been led on, I’ve been lied to.”

Vogt said last month she never promised anyone that she would definitely be able to keep people in their homes or keep them from being evicted. She said she did not feel she was “jumping the gun” by asking The Calvert Recorder to write an article, because “people launch programs all the time and that’s what we’re doing.” Vogt said after an email was sent to the list of 2,000 names asking for help to save Prentice’s house, she received only minimal donations.

In an email sent April 16 by Vogt to Prentice, Vogt wrote, “The Mutual Aid Housing program is important to me as well as all the others who are depending on its completion. At this time, we have no date for its completion or implementation.”

Vogt said the Circle of Angels has “managed to place people in homes where they’re not paying rent, which is a miracle,” one of those people being Prentice.

Vogt’s friend and fellow volunteer Donna Hoffmann said Vogt solicited help from her when Vogt was trying to find a place for Prentice to live. Hoffmann said on the day Prentice moved, Vogt spent the day helping Prentice move her things in a moving truck.

“Roseanna was doing everything she could do to help, I know she was,” Hoffmann said.

Prentice said while she does not have to pay rent at the house she is currently living in, she does have to pay for utilities and for any maintenance to the home.

Prentice claims Vogt stopped communicating with her after she was evicted. Prentice said she continued trying to contact Vogt and asked if she received any donations to help save her home.

In an email Vogt sent March 3 to Prentice, Vogt wrote, “I cannot promise or guarantee that anyone will invest. They have told me they will; however, until I get a check, I cannot promise or guarantee anything.”

In another email Vogt sent March 14 to Prentice, Vogt wrote, “You asked me to keep you in tune so I thought I better let you know that I have not met with the investor yet.”

Vogt said her organization has not been able to get banks to allow them “as a third party” to purchase Prentice’s house. “We have made bona fide offers, which were rejected,” Vogt said, though she said she has not received any money from investors.

kfitzpatrick@somdnews.com