Question: Treasurer Liability

Our school's PTO treasurer failed to file necessary tax documents for 3-4 consecutive years. Fines of over $3,000 have been levied. She was notified that this needed to be done and that there were problems, yet never took action. Does she have liability in any way or is it the PTO's sole responsibility for the fines as she was acting as their agent?

Asked by chrislarge

Answers:

Advice from PTO Today

Craig writes:
I'm not a lawyer, but I don't think there's any liability on the part of the treasurer unless there's outright fraud or some kind of real intent to harm the PTO. And I'm pretty sure the IRS isn't interested in holding an individual responsible in a situation like yours. The good news is that you might be able to negotiate the fines with the IRS. I've heard of PTOs and PTAs doing this in the past. The first step is to call the IRS and own up to being ignorant or disorganized. If you haven't done that yet, don't put it off.

Community Advice

CMay2CK writes:
We had a similar situation with our Foundation. No taxes had been filed for five years. We hired a tax firm to handle everything for us. We paid one year's fine, and the rest were waived. It was worth the money we paid the firm.

Community Advice

chrislarge writes:
Thanks - the PTO is paying for an accountant from this point forward. No idea that this hadn't been handled and that the person was incapable of doing it. Haven't heard back from IRS, but fines, etc. will be well over 3K. Quite a large amount from a fundraising organization. Trying to deal with rumbling from other parents about their money having to go to this....