A Statement from the President and Executive Director of CSCA
Dear CSCA Members
During the 2018 transition in Executive Directors between Jimmie Manning and Chad Edwards, several delinquencies in Federal Income tax filing and applications to maintain our nonprofit status with the State of West Virginia were uncovered. In short:
- We have not filed Federal Income tax returns since FY 2015. Even though as a nonprofit we are not required to pay Federal Income taxes, we are required to file returns. (The current leadership discovered the full scope of these delinquent taxes in August 2019.)
- As a result of not filing tax returns, we lost our IRS status as a tax-exempt association beginning in 2015.
- As a result of not filing income tax returns since 2015, our State of West Virginia corporate status was also revoked in 2015. (The current leadership discovered this information in October 2019.)
Upon discovering these serious oversights, the current CSCA leadership has taken the following steps to address these delinquencies:
- Prior to the Executive Director transition, Jimmie Manning retained an accounting firm in Chicago to prepare and file delinquent tax returns. The current leadership has since been supplying them with budget information for these tax years. The firm believes they now have sufficient information to file our delinquent returns once our corporate status in West Virginia is renewed. However, they have advised us it will take several months for the IRS to process our delinquent returns.
- We hired a corporate compliance company to apply for renewal of our status as an official West Virginia corporation. This is a necessary first step to enable us to file our delinquent, and then current, IRS tax returns. The compliance company has told us this issue should be resolved in the coming few weeks.
- We have also retained the services of a corporate law firm that specializes in the variety of issues we are facing. The firm believes we have taken all the necessary steps to regain our non-profit status. They will also be reviewing our bylaws and making any recommendations for ways to strengthen them.
- Finally, we have created a CSCA Presidential Ad Hoc Committee to serve as an independent advisory board as we navigate all of these tax/legal issues. Drs. Christie Beck, Donald Ritzenhein, and Deanna Sellnow have graciously agreed to serve on this committee. Among its charges, the committee has agreed to investigate the causes of our current situation and, working with our accounting firm, recommend changes in our internal controls in an attempt to prevent similar oversights in the future. Additionally, this committee plans to make recommendations regarding negligence of and actions to be taken toward the Executive Director that served during this period.
We are sending this message to all our CSCA members because we think it is important for everyone to have the facts of the situation rather than hearsay. During this time, the current Executive Committee has been informed at each step in the process. The CSCA President and the Chair of the Finance Committee have been informed on a near daily basis as events have unfolded. A few weeks ago, we informed the Past Presidents who served during the years in question as they are listed on IRS documents for their respective years.
Related to this issue, it is important for you to know that the solvency of CSCA is not at risk. Given our history when there were issues with finances, we want to assure you that we have a significant amount of money in investment and checking accounts that provide about three to four years’ worth of backup funds (even after the extra money we are needing to spend on retainers, potential fines, etc. to regain compliancy and the recognized status of the organization).
In closing, we are taking immediate action to correct the mistakes that have been made and we are committed to making all the reforms necessary to prevent anything like this from happening in the future. We are also committed to hosting a very successful conference in Chicago on April 14-19, 2020. And we thank you in advance for your support as we work our way through to a successful conclusion.
Chad McBride, President
Chad Edwards, Executive Director