*** SAINTPAULICY.COM EXCLUSIVE*** 

State of Minnesota seizes money and IRS notifies district council of potential penalties of more than $30,000 for failing to pay taxes and file returns for several years

A Reader of SaintPaulicy.com has provided documentation alerting all Board Members that Highland District Council President and new treasurer have launched an investigation of its own financial management systems after the State of Minnesota and the United States Internal Revenue Service notified the organization of serious problems resulting from the failure to file tax returns and/or pay taxes over a number of years. 

The State of Minnesota recently seized more than $1,500 from the HDC's money market account for failure to pay withholding taxes for the third quarter of 2006, leaving the account depleted to around $25.00.  The Internal Revenue Service notified the HDC that it owes more than $30,000 for failing to pay withholding taxes, interest, and penalties from the second quarter of 1998 through the second quarter of 2000.  A preliminary review by HDC leadership discovered dated and unopened mail, as well as financial records that appeared to be incomplete and in a state of disarray.

The IRS has also informed council leadership that the agency has no record of forms 990 being filed by the HDC for the years 2001 through 2005.  The potential penalties for failing to file this information could be as high as five percent of the organization's gross receipts for the years in question.

HDC leadership has called for a special informational meeting on May 23 to update the community on the investigation and discuss how to address the situation.  The informational meeting is scheduled to be held in the Village Room at the Hillcrest Recreation Center at 7pm on Wednesday, May 23.  The HDC is also asking for legal and accounting help to address the problems.  The organization may not have enough money in its general fund to cover the costs for these services.

The crisis appears to have been discovered in when a new treasurer  took office and began reviewing financial records and management practices.  SaintPaulicy.com hopes that the issue does not become a political one, but instead reaches a resolution with the best interest of the district in mind.

The District Council system has experienced financial hardships in recent years, hopefully this one is resolved in a manner that the Council will be made whole and with little or no loss to the area residents and volunteers.

SaintPaulicy will continue to update readers as more information becomes available.