SAN JOSE -- At first, it seemed the Mexican American Community Services Agency would survive a scandal that led to felony convictions of two top officials a year ago.

The organization, which has served the area's Latino immigrant community with schools, youth programs and elder care for a generation, brought in new leadership to put its financial house in order and keep programs running.

However, troubling signs in recent weeks suggest MACSA faces a new crisis that threatens its existence. The Internal Revenue Service has yet to restore MACSA's nonprofit status, which was revoked in November 2012 as the scandal over misuse of teacher pension funds was unfolding. The termination ended the organization's ability to raise tax-deductible donations.

More recently, sources say MACSA has failed to issue federal W-2 income tax statements for 2013 to its employees, raising questions about improper record-keeping and compliance with government requirements.

"I thought they had made the right changes and would come through this in a strong position," said Angel Rios Jr., a former MACSA administrator who left in 2000 and now works at City Hall. "Now I'm in shock. This is really bad news."

Executive director Michael Lopez, who took the helm after the pension scandal, said he remains confident. MACSA, he said, is surviving by charging fees for services, recruiting volunteers and earning revenue from remaining partnerships with schools and health providers.

"Donations are not what keep us moving forward," he said this week. "There is still a lot of good work happening here that will restore the credibility of the organization."

However, MACSA apparently did not inform its funders or partners about the revocation of nonprofit status, raising questions about whether they can continue to support it.

"I'm hearing this for the first time," said Salvador Chavarin, head of the Foothill Community Health Center, when told about MACSA's status by this newspaper. Foothill recently opened a clinic in one of MACSA's last remaining buildings, but the center's policy is to enter into contracts only with other nonprofit organizations in good standing.

"Now I have to go back to my board for what to do next," Chavarin said.

The Alum Rock Union school district, which learned about the revoked nonprofit status only this week from this newspaper, may no longer be able to lease a building to MACSA at bargain rates for a youth center.

"The district has now become aware of MACSA's revoked nonprofit status," Superintendent Stephen A. Fiss wrote in an email, promising to keep the board of trustees "informed and advised concerning its options."

Some observers say MACSA's workforce has shrunk from what had been dozens just a few years ago to only four employees. Lopez said he did not know how many remained.

Sources close to the organization said that Lopez and four employees are the only ones who remain on the payroll. The MACSA board members listed on the organization's website are long gone, and Lopez would not say who has replaced them, citing their right to privacy.

MACSA's latest setback follows a politically tinged scandal that resulted in two former officers agreeing to pay back thousands of dollars illegally diverted from employee retirement funds from 2004 to 2009.

The case, which forced MACSA to shutter its two charter schools in San Jose and Gilroy, had outraged many in the Latino community and singed the political career of City Councilman Xavier Campos. He was MACSA's chief operating officer at the time, but he denied any knowledge of wrongdoing and was not charged.

Desperate to put the affair behind, the organization appointed new directors and brought in a nonprofit consultant, Jose Montes de Oca, in 2010 to sort things out. Montes de Oca, who eventually resigned in frustration, said this week that he had warned the new leadership about lingering irregularities and shoddy record-keeping that would threaten the organization's nonprofit status and reputation.

"This is like a smelly onion," Montes de Oca said. "You keep peeling, and it smells uglier and uglier."

Not long after he left, the IRS revoked MACSA's good standing because the organization had failed to file required federal reports three years in a row.

Lopez said he could not file the IRS reports because MACSA's documents had been confiscated by the Santa Clara County District Attorney's Office. But Montes de Oca said the organization's accounting firm had enough information on hand and could have filed the reports on time.

Lopez said he intends to file an appeal with the IRS. But the alleged failure to issue W-2 forms to workers could undermine that effort.

Montes de Oca as well as a former employee both said that MACSA has failed to mail W-2 income tax forms to current employees by the end of January, when they are due.

Adam Moreno, a former employee, said he and others had to complain to the IRS last year about the same problem before the organization complied. A current employee, who requested anonymity out of fear of being fired, said they have not received W-2 forms for 2013. Lopez said only that he would look into the matter.

If the W-2 deadline was missed, both Rios and Montes de Oca said, the IRS isn't likely to reinstate MACSA's nonprofit status any time soon. They said the organization could still legally exist, but its fundraising efforts and reputation would be shot.

"You need that nonprofit status as just a basic means of doing business," Rios said. "That's the key for winning support from philanthropies, foundations and to winning grants from government agencies."

Contact Joe Rodriguez at 408-920-5767. Follow him on Twitter.com/JoeRodMercury.