IRS to Auction Art Taken from Nonprofit American Indian Services

December 30, 2012; Source: Bismarck Tribune

With programs focused on serving the emergency and ongoing needs of native peoples, the Sioux Falls, S.D.-based nonprofit American Indian Services, Inc. (AIS) used to host the annual Northern Plains Tribal Arts Show and Market. It had loaned 16 pieces of art that it owned for ongoing display at the Visual Arts Center at the Washington Pavilion of Arts and Science, a Sioux Falls-based nonprofit organization. Now, the Internal Revenue Service (IRS) has seized these pieces from the museum’s display and plans to auction them on January 31.

American Indian Services reportedly owes the IRS about $118,000 in unpaid taxes and penalties, an amount equivalent to between one-half and two-thirds of its average annual revenue. The IRS has set a minimum price for the collection of artwork at just under $25,000, though it reserves the right to sell the pieces separately if it appears that approach will raise more money to satisfy the tax liens.

The Washington Pavilion is seeking charitable donations to bid on the artwork in order to establish a permanent collection at the Visual Arts Center. Solicitations are being made to the Washington Pavilion’s major donors and to supporters of the former Northern Plains Tribal Arts festival.

American Indian Services representatives have had no comment on the matter, and their organization’s website is mute on the topic. There are two very striking points to this story. First, the nonprofit in question receives 98 percent of its revenue from governmental sources, according to its most recent Form 990. Also, it’s certainly unusual to see the IRS seizing the assets of an operating nonprofit for nonpayment of taxes, is it not? –Michael Wyland


Michael Wyland

Michael L. Wyland, CSL, has more than thirty years of experience in corporate and government public policy, management, and administration. An expert on nonprofit governance and public policy issues, he has been featured and quoted extensively in media including The Wall Street Journal, The New York Times, CNN, Fox News, Washington Post, The Chronicle of Philanthropy, and The Nonprofit Quarterly. He currently serves as an editorial advisory board member and contributor to The Nonprofit Quarterly, with more than 100 articles published since 2012. Michael is a partner in the consulting firm of Sumption & Wyland. Founded in 1990, the firm provides board governance consulting, public speaking and training, and executive coaching to nonprofit organizations. Sumption & Wyland has assisted more than 200 nonprofits with strategic planning services from pre-retreat research to staff-level implementation assistance and effectiveness monitoring. Speaking topics include board-CEO partnerships, nonprofit executive transition issues, and overviews of the nonprofit sector of the US economy. Michael was born in Washington, DC and raised in the Northern Virginia suburbs. Prior to co-founding Sumption & Wyland, Michael managed the computer operations for an independent oil & gas investor in Dallas, Texas and served as a staff assistant to a U.S. Representative. During his college years, he spent one summer working at the US Department of Labor and one summer working at the US Department of Justice. His past volunteer service includes various leadership positions at the local, state, and national level with the Young Republicans. He has been the secretary and president of a condominium homeowners association and the treasurer of a professional association serving computing professionals. He served as a Trustee and Vice President of Sertoma Foundation, and has been elected president of his local Sertoma club twice. In 2014, Michael was elected Chair of the South Dakota Commission for National and Community Service (Serve SD), on which he has served since its founding in 2011. He is currently working as a senior advisor to establish a national charity dedicated to the elimination of prejudice, expanding the scope and reach of the 120-year old Pi Lamba Phi fraternal organization. Michael's writing for NPQ often addresses healthcare policy and governance, scandals involving nonprofits, and the governance and policy implications of nonprofit stories in the news. He was widely quoted and cited for his work analyzing the governance issues related to the Jerry Sandusky/Penn State/Second Mile scandal in 2011. More recently, he has written more than 30 pieces for NPQ relating to the IRS scandal. In addition, he presented a paper at the national 2014 ARNOVA Conference about the IRS scandal and its implications for regulation of political activity by nonprofit organizations. Michael lives in Sioux Falls, SD with his wife, Margaret Sumption, and their dog. They have one adult son. In his leisure time, he likes to read histories and biographies, play golf, cook, and be a companion to his wife.