More than $1 million donated after an arson blaze killed five firefighters can't be distributed to their families because the charity didn't follow IRS rules.
Riverside County asked the Central County United Way in Hemet to handle the donations when offers started pouring in after the U.S. Forest Service firefighters died in October.
However, tax-exempt charitable organizations cannot raise money for a group as small and specific as the families of five firefighters. Under federal law, such groups can give money to individuals only if those individuals or families are part of a wider class and if giving the money ultimately benefits the community.
"This was a spontaneous effort — there wasn't time to go to a bunch of tax attorneys and CPAs," said Riverside County Supervisor Marion Ashley. "We feel like the IRS is the Grinch that stole Christmas."
Bob Duistermars, the local United Way's chairman, said the problem stemmed from ignorance about the process and confusion because of special exemptions made for the families of the Sept. 11 terrorist attacks.
"We were all moved by the fact that we had lost friends and family," he said. "Now we just need to catch up with the law."
An IRS spokesman wouldn't discuss the firefighters' case specifically but said the agency has clear restrictions on how tax-exempt organizations can provide financial aid.
Duistermars said expanding the fund's reach would be a last resort, but his organization intends to follow the law. He said if the fund is expanded, donors could ask for their money back.
The five firefighters were overrun by flames while protecting a home in Twin Pines, about 90 miles east of Los Angeles. The blaze destroyed 34 homes before it was contained, and an auto mechanic later was arrested. He has pleaded not guilty to arson and murder in the case.