The Purcellville Cannons unexpectedly dissolved its board of directors Aug. 15, according to an email from Cannons Secretary Brittni Fuller to donors and obtained by Loudoun Now.
“We neglected to comply with certain requirements and parameters as mandated by the state and federal government in relation to 501 (c)(3) organizations,” Fuller wrote, causing consternation among some Cannons investors. “An official advisory board will be announced at our next gathering in September.”
Cannons Head Coach and General Manager Brett Fuller said the mix-up boiled down to an IRS mistake.
“The IRS has given us 501(c)(3) status since I bought the team in 2012, and in our diligent work we discovered that we’re actually a 509(a), which is still a nonprofit,” Fuller said. “My accountants discovered all this, and we just had to dissolve the board to file the correction with the IRS.”
509(a) is a subsection of the 501(c)(3) tax code for tax-exempt nonprofits and sets the requirements for an organization to be classed as a public charity, rather than a private foundation. Private foundations face stricter regulations than public charities, including being subject to excise taxes, although to be classed as a public charity, an organization must meet certain requirements. Among those are rules about whether the organization is funded and controlled by family members.
Fuller is also the President of the Cannons, alongside his father, Cannons Vice President Donald Fuller; Brett’s son, third base coach and Cannons Treasurer Ridge Fuller; and Ridge’s wife and Cannons Secretary Brittni Fuller—although an annual report filed in January lists Stacy Locke as secretary. Donald, Brett and Ridge Fuller own the team, and many of its board members are related family members.
The Berryville-based Fuller family purchased the organization in 2012, playing at that time as the Luray Wranglers, and moved it to West Virginia, renaming it the Charles Town Cannons. The Cannons just finished their inaugural season as the Purcellville Cannons at Fireman’s Field with a playoff run.
“They’ve had us set up as a 509(a) for years, so they admit that it was just a clerical error on their behalf,” Brett Fuller said. A spokeswoman for the IRS said the agency does not comment on individual organizations. As of Monday, Charles Town Cannons Inc. was still listed on the IRS website as a tax-deductible public charity.
Valley Baseball League president and commissioner Donald Lemish said the Cannons are not the first VBL team to deal with a nonprofit classification flap with the IRS.
“I think it’s something they’re working right now to correct, and I don’t think they’re the only organization in our league that is exactly the same way,” Lemish said. “I really think it’s an IRS error in the first place when they gave the classifications. They probably should have been classified as private foundations, not classified as public charities.”
Lemish also said he has called it to the attention of other organizations in the VBL, to make sure they are classified correctly.
Fuller and Lemish both downplayed the snafu and said donations to the Cannons are still tax-exempt.
“They’re not the issue there,” Lemish said. “Their donations are definitely tax-exempt.”
“Everything will be fine, everything will be exactly normal, everybody’s donations are still valid as tax write-offs and everything,” Fuller said.