Auburn Trustees Charged for IRS Penalties, Interest
March 23, 2023 by Ann Wishart

Auburn Township Trustees, on the advice of legal counsel, voted unanimously March 20 to pay $25,946 to the IRS for five quarters of unfiled tax returns discovered March 6.

Auburn Township Trustees, on the advice of legal counsel, voted unanimously March 20 to pay $25,946 to the IRS for five quarters of unfiled tax returns discovered March 6.

That includes $22,417 to cover the tax returns, $1,660 in penalties and $1,868 in interest charged by the IRS, said township Fiscal Officer Dan Matsko.

Additional costs related to the failure to file include a $1,200 contract with the auditor of state to prepare a financial statement and account report for 2022 and a $6,800 contract with the state to prepare a bank reconciliation for 2022.

Matsko said after the meeting the missed returns were from various quarters in 2020, 2021 and 2022.

The vote Monday followed trustees’ lengthy discussion about how the problem arose and what could be done in the future to avoid a repeat performance.

An IRS agent visited Matsko on the first week he was in office to inform him the township was delinquent on some tax returns.

The agent said then township Fiscal Officer Fred May had been sent notices, but failed to respond.

“He interviewed me and presented me with a final notice for $25,945.81,” Matsko said. “He also gave us a notice of (how to) appeal if we wanted. After consulting with the (Geauga) county prosecutor and a tax attorney, it was advised to just pay it.”

Trustee PJ Cavanagh noted the money was in the township budget and employees and vendors had been paid.

“The point is, it was just a clerical error,” said Trustee Mike Troyan.

Matsko repeated the agent told him May was notified and never responded.

That led Trustee Gene McCune to suggest a possible solution to missed communications would be to have all emails go to all trustees, as well as the fiscal officer.

“Everybody should have an idea of what’s going on here. Every email goes to everyone,” he said. “The only person who got the letter that we were delinquent was the guy making us delinquent.”

McCune asked if the policy in place could be changed, adding the fiscal officer would get to see emails to the trustees, as well.

Troyan asked Matsko about emails containing privileged information. The fiscal officer said medical insurance emails come to his office often. Sharing that information could violate privacy laws.

“What are other townships doing?” Troyan asked, adding the Ohio Townships Association might have a solution to the problem.

McCune also said the township should “go after” May for the penalties the township incurred due to his failures.

“There is a bond … for these types of things,” Cavanagh said, adding he would investigate how the township might collect from the insurance company that collects the bond. All township officials are bonded.

The township received a letter of resignation Feb. 7 from May, who had been fiscal officer for eight years. Matsko was hired as his part-time assistant in July 2022. In November, May violated his probation that stemmed from a DUI arrest and Matsko was appointed deputy fiscal officer. On March 6, trustees appointed him fiscal officer.

That week, the IRS agent visited Matsko’s office.

“It was a friendly visit,” Matsko said Monday, referring to the rumor his office was raided by the IRS. “I asked him if he was armed. He said he wasn’t.”