The chapter failed to disclose the chief executive officer's salary on Internal Revenue Service forms, as required by law, the Providence (R.I.) Journal reported Monday.
The chapter is also accused of divulging confidential information about local children with life-threatening medical conditions who had their wishes fulfilled by the group, the newspaper reported.
The Make-A-Wish Foundation of Rhode Island is fighting the national organization's move in federal court.
The national group says it is not pursuing a consolidation policy and is acting because of "significant violations of the Make-A-Wish Foundation's governing policies and performance standards -- including intentionally failing to report required information about the compensation paid to its president and CEO."
U.S. District Judge William Smith last week suggested the local chapter pursue arbitration.