2012-03: Sixth 30 day Warning of imminent seizure demand notice Demand letter for non-response likely from IRS reminding SMotA Opposed Treasurer that withholding of January 2011 severely overdue; no letter or report on this given to Vestry or Fr KelleyAs the parish's interim treasurer between September and December 2011, I had direct experience of the issues that led in part to this curious business. Although I was fairly new to the parish (having attended only since January 2011), I'd been attending various adult education and Bible study groups as well as mass, and the rector and some of the vestry had gotten to know me pretty well. During the summer, the regular treasurer unexpectedly resigned, and Fr Kelley and the senior warden approached me to see if I'd take over as interim treasurer.
2012-03-15-16: Seventh Two week Final Warning Demand letter for non-response likely from IRS reminding SMotA Opposed Treasurer that withholding of January 2011 severely overdue; no letter or report on this given to Vestry or Fr Kelley
2012-03-30: An IRS letter of Final Notice before Seizure arrives 4 days early. Immediate phone calls are placed to the IRS. Seizure agent recognizes that this is entirely a surprise to the Vestry [with the likely exception of Marilyn Bush] and is over an $800 employee withholding payment not made in January, 2011. The IRS advises it would have sent repeated letters regarding this throughout the year previous.
(Might SMotA Opposed have likely intercepted these letters and NOT presented them to the Rector Wardens and Other Vestry?)
The IRS agent in charge of the seizure scheduled for Monday, 4/2/12, looks over Saint Mary of the Angels’ record of its recently hired accountant and Saint Mary of the Angels having initiated steps to reconcile other out standing issues and decides Saint Mary of the Angels was neither “oppositional” nor “non-compliant”, but merely “uninformed.” An immediate automatic tax resolution is put in place.
As it happened, my work experience sometimes involved computer disaster recovery planning, which was a good background for what I found as interim treasurer, and I'd been an assistant treasurer responsible for the Sunday count at a prior Episcopal parish. What I discovered was that although the parish had a new computer in a perfectly satisfactory treasurer's office, the treasurer had been doing all her work on her home computer, and the records and paper files she'd moved to the office prior to resigning were by no means complete.
In fact, her resignation was what a computer disaster planner would call a "disaster", which strictly speaking is any unplanned event that interrupts normal business computer processing. A payroll was due within a short time, for instance, but I had absolutely no records to show how much anyone got paid or how much they had withheld. I couldn't find any records of prior withholding payments to the IRS, either. Discussions with Fr Kelley and the senior warden indicated that nobody had been satisfied with the treasurer's performance -- for instance, I asked to see samples of prior treasurer's reports to the vestry so I could see what information they were used to having. I was told that the treasurer hadn't been making them, so unfortunately, they couldn't provide samples.
I don't know what discussions took place between Fr Kelley, the wardens, and the treasurer, and they would be confidential anyhow, but the upshot was that she'd resigned, and this was probably the only possible outcome. Any rector is only nominally responsible for a parish's business operations, which are supervised by the vestry. Whatever was done to nudge the treasurer into resigning was pretty clearly proper, in my view. The missed withholding payment from January 2011 that ultimately led to the IRS threat of seizure was simply part of the treasurer's overall unsatisfactory performance, and Fr Kelley, with the senior warden, had moved to correct this problem as far as they could by the summer of 2011.
The first thing I did to meet the payroll was what any business has to do under similar circumstances, whether that's a fire, earthquake, hurricane, or anything else that makes it impossible to process a new payroll that's due in a short time: you simply go back to the prior payroll, two weeks earlier, and issue checks to exactly the same people for exactly the same amounts, which will take care of 95% of the problem, and clean up the discrepancies as soon as you can.
That made sure that the babysitters, clergy, housekeepers, music director, and choir could pay the groceries. A bigger problem was what to send the IRS for the tax and social security withholding, because there were no records. I figured the easiest way to handle this would be to solve the whole darn problem -- bring in a payroll service. Pay them one check each month and let them handle all the paychecks by direct deposit, calculate the withholding correctly, and send that to the IRS. If we did that right once, we wouldn't have to worry about it again.
I took the idea to Fr Kelley and the senior warden, who supported it. I made the recommendation at the next vestry meeting as well, and they gave me the go-ahead.