Bingo Boom or Accounting Bust? Colorado Nonprofits Face Scrutiny

By David Migoya | The Denver Gazette

Editor’s note: This is the last in a three-part series examing Colorado’s $110 million charitable gaming industry.

Colorado nonprofits that rely on charitable gaming to raise funds – most through bingo nights – are required to file regular financial reports with state regulators that track how much money comes in, how much goes out and where the dollars are dispersed. 

Although nearly all of the more than 600 organizations licensed for charitable gaming in Colorado are tax-exempt groups recognized by the IRS, not all of them have given the federal government the same complete picture of their bingo finances that they’ve given the state, tax records show. 

A three-month Denver Gazette investigation into Colorado’s charitable gaming industry found the state – or anyone else for that matter – frequently paid little attention to what the gaming groups earning money told the federal government. 

In fact, several groups routinely misreport their charitable gaming revenues to the IRS, The Denver Gazette has found, a requirement that could endanger a group’s tax-exempt status for not complying or even result in an unexpected tax levy, experts say. 

Nonprofits that are recognized as tax-exempt must file a federal tax return, known as a Form 990, when their gross receipts exceed $200,000, or a shorter 990-EZ when they are at least $50,000. Those returns are, by law, public and must be made available on request or on a website.

In at least two cases, The Gazette found organizations that, despite having raised hundreds of thousands of dollars from bingo, haven’t reported a dime of it to the IRS, according to a review of their 990 tax filings. 

READ THE COMPLETE STORY AT THE DENVER GAZETTE