Felner's Non-Profits: A Simple Theory

I'm no expert, and I could certainly be fooled when it comes to tax forms, but I can't find anything wrong with the following theory.... sent to KSN&C from anonymous. So, I thought I'd shine a little light on it...for your reaction. Whadya think?

Notes from one who's spent too much time with tax forms.

A 1099 reports one year's payments to an independent contractor. For calendar 2007 payments, they should have been mailed by January 31, 2008. That legal requirement was clearly not met.

The 1099 must be mailed to the contractor. A 1099 for $36,400 was mailed to Felner. So, Felner was paid that as a contractor on the grant he also oversaw as a U of L administrator.

Or, alternatively, he received a 1099 made out to someone else, which would violate the IRS rules.

Also missing in the story is the (alleged) non-profit's federal 990 forms.

A 990 is equivalent to the 1040 we all know, but for non-profit organizations bring in more than minimal revenue. In addition to revenues and expenses,it shows assets and liabilities, and it also shows employees and contractors paid more than $50,000.

At guidestar.org, one can usually see the ones filed in recent years. However, the organization getting the big checks from U of L isn't listed as ever having filed one.

Informed guess: the conference call with the IRS was about that missing 990 paperwork.

Reasonable possibility: the inability to file the 990 could be what triggered the federal investigation.