DavidEHickey
Junior Member
What is the name of your state (only U.S. law)? Ohio
I live in Ohio, I've been a Trustee of a small 501 C7 private club on and off for about 6 years. From the time I started things were Rocky trying to make ends meet. At one point a year and a half into my 2nd term my fellow Trustees among other things fired our accountant / book keeper. I had enough as I knew nobody on the current board could handle the taxes and such that the Club would require. It was decided a new cheaper book keeper would be hired. They did not hire a new person. I submitted my resigniation. 6 months later or so new elections were held and we got a new Trustee elected. He was a former banker, and everyone thought he was the savior of the Club, he turned things around and gave great financial reports, everything sounded great. He contacted me and asked if I would come back on board as an appointed Trustee to help implement the changes he and a fellow trustee had made. I agreed and 6 months later when elections were held I ran for trustee again and was elected head Trustee "who ever gets the most votes is the head trustee the following year, head Trustee has no additional duties just does the talking at the membership meetings which I elected not to do I let the new Trustee continue leading the meetings" Well the 2 Trustees who had been running things continued to handle all of the financial dealings, we had a drawer with all the daily reciepts and deposits which only those 2 had a key for. The other 3 trustees handled other functions "instant tickets, maintenance, and kitchen". Here is the problem, about a month ago The Trustee's in charge of the finances starting hinting that we may not be able to get our liquor license renewed due to delinquent sales taxes. He said we may have to pay 5,000.00 or so to get them up to date. He went out of town so I decided I would call the State to see what our situation was. It turns out in total we owe over $7,500.00 or more in unpaid sales tax from last year. I was told that This Trustee had made a deal with the Ohio Department of Taxation and got our liquor license on a conditional basis last year dependent on catching up on the sales taxes. No taxes were then paid and she said they could not work with us the amount had to be paid in full, and that the Ohio Attorney Generals office also was owed money that would have to be paid. So in adddition to the $7,500.00 in unpaid taxes for the prior year the Attorney Generals office informed me we owed a minimum of $13,500 for years prior to last years taxes, but had months were no taxes were filed so she did not even know what our final bill was. Apparently no sales taxes had been paid for going on 2 and 1/2 years. I informed her that there was no way we could afford to pay this and asked what our options are. She pretty much said no options if they are not paid they would assess the amount to all of the officers personally and we would personally be liable for the taxes. This got my attention quickly. I'm a non paid volunteer Trustee who had no idea I had any personal liability and had no idea of the situation we were in. The financial end of the Club business for the most part was handled by the 2 financial Trustees. The other Trustees including myself may have had an idea we were behind by a month or so but had no idea how severe the situation was until a week ago when he came right out and said we were 2.5 years behind. I think he realized by that point it was going to come out either way. Could I really be liable for upwards of $23,000.00 ??? Any advice would be appreciated, I don't have a clue what my next course of action should be. Should I just wait until it all caves in and see if they contact me? Or are there proactive steps I should be taking to distance myself from the Club?
Thanks
I live in Ohio, I've been a Trustee of a small 501 C7 private club on and off for about 6 years. From the time I started things were Rocky trying to make ends meet. At one point a year and a half into my 2nd term my fellow Trustees among other things fired our accountant / book keeper. I had enough as I knew nobody on the current board could handle the taxes and such that the Club would require. It was decided a new cheaper book keeper would be hired. They did not hire a new person. I submitted my resigniation. 6 months later or so new elections were held and we got a new Trustee elected. He was a former banker, and everyone thought he was the savior of the Club, he turned things around and gave great financial reports, everything sounded great. He contacted me and asked if I would come back on board as an appointed Trustee to help implement the changes he and a fellow trustee had made. I agreed and 6 months later when elections were held I ran for trustee again and was elected head Trustee "who ever gets the most votes is the head trustee the following year, head Trustee has no additional duties just does the talking at the membership meetings which I elected not to do I let the new Trustee continue leading the meetings" Well the 2 Trustees who had been running things continued to handle all of the financial dealings, we had a drawer with all the daily reciepts and deposits which only those 2 had a key for. The other 3 trustees handled other functions "instant tickets, maintenance, and kitchen". Here is the problem, about a month ago The Trustee's in charge of the finances starting hinting that we may not be able to get our liquor license renewed due to delinquent sales taxes. He said we may have to pay 5,000.00 or so to get them up to date. He went out of town so I decided I would call the State to see what our situation was. It turns out in total we owe over $7,500.00 or more in unpaid sales tax from last year. I was told that This Trustee had made a deal with the Ohio Department of Taxation and got our liquor license on a conditional basis last year dependent on catching up on the sales taxes. No taxes were then paid and she said they could not work with us the amount had to be paid in full, and that the Ohio Attorney Generals office also was owed money that would have to be paid. So in adddition to the $7,500.00 in unpaid taxes for the prior year the Attorney Generals office informed me we owed a minimum of $13,500 for years prior to last years taxes, but had months were no taxes were filed so she did not even know what our final bill was. Apparently no sales taxes had been paid for going on 2 and 1/2 years. I informed her that there was no way we could afford to pay this and asked what our options are. She pretty much said no options if they are not paid they would assess the amount to all of the officers personally and we would personally be liable for the taxes. This got my attention quickly. I'm a non paid volunteer Trustee who had no idea I had any personal liability and had no idea of the situation we were in. The financial end of the Club business for the most part was handled by the 2 financial Trustees. The other Trustees including myself may have had an idea we were behind by a month or so but had no idea how severe the situation was until a week ago when he came right out and said we were 2.5 years behind. I think he realized by that point it was going to come out either way. Could I really be liable for upwards of $23,000.00 ??? Any advice would be appreciated, I don't have a clue what my next course of action should be. Should I just wait until it all caves in and see if they contact me? Or are there proactive steps I should be taking to distance myself from the Club?
Thanks
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