D.C. Mayor Vincent Gray acknowledged that tax liens filed against Transgender Health Empowerment by the IRS has forced the city to discontinue its funding for the organization, even though it has provided important services for the transgender community.

In an interview with the Washington Blade on Saturday, Gray said he was aware of ongoing financial problems at THE, the city’s oldest and most prominent transgender advocacy and services organization.

Among other things, the group has provided HIV and housing-related services for transgender clients through funding from city grants.

“I don’t know the details of how much and that sort of thing,” Gray said in referring to how much money THE owes the IRS.

“But any organization that has a grant from the government is going to have to comply with the basic rules of conformance with the requirements of the government, including paying your taxes,” he said.

“So while they certainly have been helpful and I have a lot of admiration for that organization, they are going to have to straighten this out,” Gray said. “It wouldn’t be fair if organization X is absolved of responsibility and organization Y would be held accountable for this.”

Added Gray, “So we’ll work with them to try to get this resolved. But they’re going to have to pay the taxes. There’s no question about that….It’s a basic, fundamental rule that any organization that has a grant or contract with the government – they have to take care of these basic administrative responsibilities.”

Gray’s comments came at a time when transgender activists have expressed concern that the D.C. Department of Health, which is responsible for monitoring THE grants, has not said whether it’s taking steps to redirect the group’s clients to other service providers.

“Transgender Health Empowerment (THE) has had to dramatically curtail their services due to financial difficulties,” said the D.C. Trans Coalition in a statement on May 9.

“This reduction happened very suddenly, and services trans community members depend on have been abruptly cut off,” the statement says. “Immediate action must be taken to ensure THE clients get services they need to ensure continuity of care.”

The statement says D.C. Trans Coalition “stands with THE’s clients and calls on the D.C. government, as THE’s primary funder, to act quickly to make sure that necessary services continue.”

A spokesperson for the Department of Health, as well as its gay interim director, Dr. Saul Levin, and the gay head of the department’s HIV/AIDS office, Dr. Gregory Pappas, have not responded to requests for comment and requests for information on the THE situation from the Blade.

THE’s executive director, Anthony Hall, has also declined to comment. Brian Devine, THE’s finance manager, told the Blade the group’s board of directors, which met recently, decided the organization would not issue a statement at the present time.

Transgender activist Ruby Corado, director of Casa Ruby, an LGBT community center in Columbia Heights that reaches out to the Latino and transgender communities, said THE clients have approached Casa Ruby for assistance after discovering that services at THE were no longer available to them.

She said officials with the Department of Health had not responded to her request for information about who, if anyone, would provide help for the THE clients displaced by THE’s reduction in services.

“I have an issue with the government doing that,” Corado said. “You just don’t drop people like that. If you are withholding money from an agency that is providing services you need to make sure that in the meantime you are able to transition the clients,” she said. “And I don’t think that has happened.”

Public records at the D.C. Office of the Recorder of Deeds show that the IRS filed at least 10 liens against THE since early 2010. Most are due to THE’s failure to pay employee payroll taxes, the records show.

As a non-profit organization, THE is not required to pay taxes on income from private donations, government grants or other income sources.

Another sign of THE’s financial problems surfaced last week when its web hosting company suspended the group’s website. “This site has stepped out for a bit,” a note on the only remaining page of the site says. A phone number on the page directed to the “site owner” takes callers to the billing department of the web hosting company Go Daddy.