In a
letter in the October 3, 2007, issue of the Sun Cities Independent,
Mr. Donald G. Tabacchi raised some concerns about RCSC’s 2006
federal income tax return. The RCSC Board of Directors would like to
respond to Mr. Tabacchi’s concerns.
RCSC’s IRS Form 990 for 2006 was completed by our CPA firm, which has a
tax manager in charge of filings for nonprofit corporations such as RCSC.
Based on their experience and research, they prepared the tax return and
its related schedules.
The over $1 million loss for sale of assets to which Mr. Tabacchi refers
is the write-off of the undepreciated portion of the Sundial roof cost
from the 1987 rebuild, as well as the undepreciated portion of other
assets damaged at Sundial and other corporation assets that had been
previously replaced. Instead of mentioning this information in a
separate schedule as Mr. Tabacchi suggests, it was presented on the form
in summary totals—standard practice for corporate and nonprofit tax
returns, which may have hundreds of pages of detail information for IRS
schedules or additional statements.
Mr. Tabacchi
also discusses the listing of RCSC’s “key employees” on the Form 990.
RCSC has never listed employees because they do not meet the IRS’s
definition for key employees, which is “any person having
responsibilities, powers, or influence similar to those of officers,
directors, or trustees.” RCSC Directors and officers have powers and
responsibilities as defined in the RCSC Articles of Incorporation and
Bylaws, and RCSC managers or employees do not. The fact that the tax
return only shows eight Directors is due to the fact that at the time
the return was prepared RCSC only had eight Directors due to a
resignation.
Regarding Mr.
Tabacchi’s comments on the golf division, for many years RCSC’s policy
has been to permit outside golfers during the summer, but RCSC
cardholders have always been able to make tee times before any outside
golfers. The RCSC golf division does currently have an operating
deficit, and the Board of Directors is addressing this through the new
golf fee structure and additional outside play.
Finally, to
respond to Mr. Tabacchi’s discussion of the RCSC food and beverage
division, all RCSC food and beverage employees were considered for
employment with the new leasing company. Most of the employees had been
hired by the new leasing company as of October 1. The decision to lease
the RCSC food and beverage operations was not taken lightly by RCSC
management, but it was necessary to eliminate the food and beverage net
operating deficit.
Denny Nichols
President,
RCSC Board of Directors
