Fund Board failed to file tax returns for 3 years
President says paperwork has been submitted to IRS
June 3, 2010
Steamboat Springs — The Education Fund Board failed to file annual tax returns to the Internal Revenue Service for three consecutive years but has since submitted the paperwork, and its president said he didn't think the issue would affect the nonprofit's tax-exempt status.
It was revealed at the end of Wednesday's Fund Board meeting that CPA Paul Strong, its accountant, didn't file the Form 990 this year. Fund Board President Mark Andersen said Thursday that Strong filed the annual return before the May 17 deadline. He said Strong also has filed the previous two years' returns.
The IRS sent a notice to the Fund Board in March informing the board that its tax return was late. Andersen said Strong did not tell the board about the notice until Wednesday. Andersen said the accountant wanted to rectify the situation before telling the board about the delinquent tax filings.
As a nonprofit group, the Fund Board does not pay taxes, but it is required to file an annual tax return that includes reporting information such as revenue and contributions, according to the IRS website. The site indicated that a nonprofit group's tax-exempt status could be automatically revoked after failure to file the tax return for three consecutive years.
"We believe because we filed before the deadline that our tax-exempt status is not in jeopardy," Andersen said.
He added that the IRS would review the Fund Board's tax filings and issue a letter, which could include a penalty. Andersen said the Fund Board would have the chance to appeal a penalty and would make that decision depending on what it hears from the IRS.
The IRS website indicated that a nonprofit group with receipts in excess of $1 million can face $100 daily penalties for late tax return filings, with a maximum of $50,000. The half-cent sales tax through March had generated more than $1.7 million.
Strong didn't return several messages left Thursday on his home/office and cell phones.
Andersen said there are no concerns with Strong about any other issues of malfeasance. Andersen said, to his knowledge, Strong didn't improperly report the Fund Board's revenue and contributions on tax returns in the past. He said this was the first time the board has encountered this issue.
"It's my understanding the tax returns have been filed appropriately, just not timely," Andersen said.
Strong joined the Fund Board as its accountant in 1997. He was a two-term member of the Steamboat Springs City Council and served as its president from 2003 to 2005. He ran unsuccessfully in 2006 for the District 3 Routt County commissioner seat.
During Wednesday night's Fund Board meeting, board members unanimously approved a motion to seek bids for a new accountant.
Andersen said soliciting bids is his top priority. The Fund Board has a 2010-11 budget of $30,000 that covers administrative costs, which include its accountant, secretary, attorney and auditor.
As the Fund Board's accountant, Strong was paid $928 a month.