Following is a blog-post that I strongly suggest that you, your colleagues and friends associated with nonprofit or trustee organizations read carefully. As you read it, please keep the material below the link in mind.
I think the situation presented above is more common than most directors/trustees think. As a layperson, I am surprised that the court did not spread the fine among all the directors.
The chairman was clearly trying to support a nonprofit in trouble. Perhaps he was so dedicated to the mission that he was trying to do everything possible to save it? Not Shown here is the fact that, “[T]he chairman is burdened with proving that they (the IRS) are not correct. … The law does not require the individual to have complete control over the finances, only what the court calls significant control.” (more…)