CC - Item 6B - Funding IRS Penalties of Rosemead Youth AssociationI ROSEMEAD CITY COUNCIL
STAFF REPORT
TO: THE HONORABLE MAYOR AND CITY COUNCI
FROM: JEFF STEWART, INTERIM CITY MANAGER
DATE: MAY 12, 2009
SUBJECT: FUNDING THE IRS PENALTIES OF THE SSEMEAD YOUTH ASSOCIATION
SUMMARY
Council Member Armenta made a request at the City Council meeting on April 28, 2009, for staff
to bring back an agenda item regarding the contribution of funds from the City to pay off the
Internal Revenue Service penalties assessed to the Rosemead Youth Association (RYA). Staff
contacted the RYA Treasurer, Desiree Tuyia, and found that the RYA currently owes $9,890.43
in penalties for not filing the necessary annual financial data on time with the IRS for the years
of 2004, 2005 and 2007.
Staff Recommendation
That the City Council provide direction regarding the contribution of funds to the Rosemead
Youth Association.
ANALYSIS
On April 24, 2007 the City Council received a request from the RYA to assist with funding their
2007-2008 baseball and softball seasons. RYA had raised approximately $88,000 for ther
season, but needed an additional $15,000 to fully fund their programs. At that time they
explained that due to issues related to the previous Board of Directors, they were unable to
provide historical financial records, but committed to providing an update at the conclusion of
their season. On May 8, 2007 the City Council approved the RYA's request for financial
assistance in the amount of $15,000.
As promised, the RYA sent a letter (Attachment A) to the Mayor on October 10, 2007 detailing
their financial status. The letter stated that the RYA had been assessed IRS penalties in excess
of $8,000 due to the failure of filing the annual financial reports for the years for 2002 and 2003.
The letter also stated that the 2004, 2005 and 2006 annual reports also had not been filed and
that the RYA Board was working on this, but needed to obtain copies of checks from their bank
as all the financial records were missing. They estimated that the cost for obtaining check
copies was $700 and requested funds to start up the 2008 season and mend their tax problems.
The City Council approved funding in the amount of $15,000.
At the City Council meeting of April 28, 2009, the Treasurer for the RYA addressed the Council
regarding the current financial status of the RYA in relation to potential fees that could be
charged by the City for field and facility rentals. At that time the Treasurer also mentioned that
the RYA was currently paying down approximaly $9,000 in fines from the IRS. Council Member
Armenta requested that staff bring back an item at the next meeting to consider assisting the
RYA paying off the IRS fines. Since that time, staff has been working with RYA's Treasurer and
was provided account transcripts (Attachment B, C & D) from the IRS totaling $9,878.51. Since
APPROVED FOR CITY COUNCIL AGENDA:
City Council Meeting
May 12, 2009
Page 2 of 2
these transcripts state that they are not be used as payoff statements, staff was able to verbally
obtain a payoff figure of $9,890.43 which includes all accrued interest and is valid until May 29,
2009.
FINANCIAL IMPACT
There are currently $31,631 available in the Community Contributions account 4160-6320.01.
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process.
Submitted by:
r
Matthew E. Hawkesworth
Assistant City Manager
Attachments: A - Letter from RYA dated Oct. 10, 2007
B - IRS Transcript for 2004
C - IRS Transcript for 2005
D - IRS Transcript for 2007
0 0
October 10, 2007
VIA EMAIL: ltran(alcitvofrosemead.ore
John Tran
Rosemead City Hall
8838 East Valley Blvd
Rosemead, CA 91770
Dear, Mr. Tran
RYA Hodme: (626) 588-4994
First, I would like to thank you and your council for the grant that Rosemead Youth Association "RYA"
received earlier this year from the City of Rosemead. The RYA board and myself appreciate all the help
that you have given this youth organization.
The grant received was to be used to start up the 2008 season. Unfortunately, RYA was hit with an IRS
tax levy that left the RYA account with a balance of $700.00. Apparently, the previous board members
failed to file the organization's taxes on time for the years of 2002 and 2003. Therefore, there was a tax
penalty of over $8,000. Furthermore, the taxes for 2004, 2005, and 2006 still need to be filed, which RYA
is trying to do. However, we are in a bind, we do not have any records from the previous years to properly
file the taxes. All we have are bank statements and that is not enough. We need to get copies of checks
and our bank (Bank of America) charges $2.00 per copy and we do not have enough funds to cover that
expense. Additionally, we do not have money to start up our new season.
With this in mind, please consider our organization for further funding in order to start up our 2008 season
and mend our tax problems. Anything you can do for RYA will be much appreciated.
In closing, I would like to thank you for your time in considering our proposal. Please call me if you have
any questions or concerns at 626-827-2348 or Sergio Nava at 626-672-8297.
Sincerely,
Rosemead Youth Association
Treasurer
Sergio Nava Larry Nava Nora Munguia Andrea Nava
DIRECTOR
T•
05/04/2009 15:06 FAX
2009/05/04 18:39:20
ATTACHMENT B
8 Internal Revenue Services
e-serves
DEPARTMENT Of THE TREASURY
Q0001/0004
Page: 2/4
This Product Contains Sensitive Taxpayer Data
Request Date: 05-04-2009
Account Transcript Response Date: 05-04-2009
Tracking Number: 100043599401
FORM NUMBER: 990EZ
TAX PERIOD: Dec. 31, 2004
TAXPAYER IDENTIFICATION NUMBER: 95-6111905
ROSEMEAD YOUTH ASSOCIATION
PO BOX 84
ROSEMEAD, CA 91770-0084-942
ANY MINUS SIGN SHOWN BELOW SIGNIFIES A CREDIT AMOUNT
ACCOUNT BALANCE:
ACCRUED INTEREST:
ACCRUED PENALTY:
ACCOUNT BALANCE PLUS ACCRUALS
(THIS IS NOT A PAYOFF AMOUNT):
$3,270.00
$144.41 AS OF: May 18, 2009
$0.00 AS OF:
$3,414.41
INFORMATION FROM THE RETURN OR AS ADJUSTED
TAX PER TAXPAYER: $0.00
RETURN DUE DATE OR RETURN RECEIVED DATE (WHICHEVER IS LATER) Mar. 04, 2008
PROCESSED DATE Aug.. 11, 2008
TRANSACTIONS
11
CODE EXPLANATION OF TRANSACTION
CYCLE DATE
AMOUNT
150
Tax return filed
200831 08-11-2008
$0.00
29409-194-07525-8
599
Tax return filed
05-23-2008
$0.00
238
Daily delinquency penalty
200831 08-11-2008
$3,770.00
971
Tax period blocked from automated levy
program
11-03-2008
$0.00
971
Collection due process Notice of Intent
to Levy -
- 10-21-2008
$0.00
issued
971
Collection due process Notice of intent
to Levy -
- 10-23-2008
$0.00
return receipt signed
670
Payment
01-20-2009
-$500.00
05/04/2009 15:06 FAX
Q0002/0004
2009/05/04 18:39:20 Page:3/4
971 Installment agreement established 02-13-2009 $0.00
This Product Contains Sar:s zve Taxpayer. Data
05/04/2009 15:06 FAX
2009/05/04 18:38:15
ATTACHMENT C
Internal Rew nine Service
OFPARTMEHT OF THE TREASURY
Z 0003/0004
Page: 2/3
This Product Contains Sensitive Taxpayer Data
Request Date: 05-04-2009
Account Transcript Response Date: 05-04-2009
Tracking Number: 100043599401
FORM NUMBER: 990EZ
TAX PERIOD: Dec. 31, 2005
TAXPAYER IDENTIFICATION NUMBER. 95-6111805
ROSEMEAD YOUTH ASSOCIATION
PO BOX 84
ROSEMEAD, CA 91770-0084-842
ANY MINUS SIGN SHOWN BELOW SIGNIFIES A CREDIT AMOUNT
ACCOUNT BALANCE:
ACCRUED INTEREST:
ACCRUED PENALTY:
ACCOUNT BALANCE PLUS ACCRUALS
(THIS IS NOT A PAYOFF AMOUNT):
$2,548.00
$126.90 AS OF: May 18, 2009
$0.00 AS OF:
$2,674.90
INFORMATION FROM THE RETURN OR AS ADJUSTED
TAX PER TAXPAYER: $0.00
RETURN DUE DATE OR RETURN RECEIVED DATE (WHICHEVER IS LATER) Mar. 05, 2008
PROCESSED DATE Aug. 04, 2008
TRANSACTIONS
CODE
EXPLANATION OF TRANSACTION
CYCLE DATE
AMOUNT
150
Tax return filed
200830 08-04-2008
$0.00
87409-185-OOC13-8
238
Daily delinquency penalty
200830 08-04-2008
$3,198.00
971
Tax period blocked from automated levy program
01-12-2009
$0.00
971
Installment agreement established
02-13-2009
$0.00
670
Payment
03-12-2009
-$650.00
This Product Contains Sensitive Taxpayer Data
05/04/2009 15:06 FAX
2009/05/04 18:40:33
R0004/0004
Page: 2/3
ATTACHMENT D
rj Internal Revenue Service e-services
DEPRRTMENT OF THE TRERSURY
This Product Contains Sensitive Taxpayer Data 11
Request Date: 05-04-2009
Account Transcript Response Date: 05-04-2009
Tracking Number: 100043599401
FORM NUMBER: 99CEZ
TAX PERIOD: Dec. 31, 2007
TAXPAYER IDENTIFICATION NUMBER: 95-6111805
ROSEMEAD YOUTH ASSOCIATION
PO BOX 84
ROSEMEAD, CA 91770-0084-842
ANY MINUS SIGN SHOWN BELOW SIGNIFIES A CREDIT AMOUNT
ACCOUNT BALANCE:
ACCRUED INTEREST:
ACCRUED PENALTY:
ACCOUNT BALANCE PLUS ACCRUALS
(THIS IS NOT A PAYOFF AMOUNT):
$3,740.00
$49.20 AS OF: May 18, 2009
$0.00 AS OF:
$3,789.20
INFORMATION FROM THE RETURN OR AS ADJUSTED
TAX PER TAXPAYER: $0.00
RETURN DUE DATE OR RETURN RECEIVED DATE (WHICHEVER IS LATER) Nov. 18, 2008
PROCESSED DATE Feb. 02, 2009
TRANSACTIONS 11
CODE EXPLANATION OF TRANSACTION CYCLE DATE AMOUNT
150 Tax return filed 200903 02-02-2009 $0.00
29409-362-32707-8
238 Daily delinquency penalty 200903 02 -02-2 00 9 $3,740.00
971 Installment agreement established 02-13-2009 $0.00
This Product Contains Sensitive Taxpayer Data