No 1099's filed

Cheryl,

It's likely that the financial committee doesn't have the authority to file a correction to the 1096 and issue a 1099-misc, as this authority typically rests with the Board.

Therefore, what is it you want to accomplish?

Do members of the Committee what to "stick it" to the landscaper?

Then as an individual, contact the IRS and inform them that you believe this individual earned money but did not report it. The IRS may or may not investigate. Of course, there may or may not be repercussions for the Association if the IRS does investigate. This could range from simple penalties for failure to file a 1099 to having the IRS determine that the individual was an employee and holding the Association responsible for payroll, medicare and social security taxes.

Do members want to correct the issue?

Then point the problem out, let the Board decide what they want to do about it and move forward. If you believe the Board acted improperly, then gather support and recall them or vote them out of office at the next election.

As I said, what is it you want to accomplish?

Tim

I think this problem may be more common than one would want. Our HOA never filed any 1099 for the landscaper last year or this year.

In California that can lead to problems with the EDD and the tax board and your corporate status can be suspended according to the Davis-Stirling website.

Once person can make such a decision because others allowed it.

The Board allowed it by not taking any action against the individual (removing them from Office, starting a recall effort and contacting the grant writer and saying that the individual did not have the support or authority from the Board to issue such a statement.

The membership (or at least a majority of the membership) allowed it by not holding the board accountable by recalling the board.

The authority for the membership to recall/remove a Director, or the entire board, would be within your governing documents and, if the Association is incorporated, within the States applicable corporate law.

The Process consists of calling a special meeting of the general membership for the purpose of recalling/removing Director/s x,y,z and if successful to vote in a replacement.

Sometimes, once a petition to call a special meeting to recall is submitted, the individual may step down on their own. If this happens, the Board would have the right to appoint a replacement as the vacancy occurred because of a resignation.

A typical recall procedure would be:

1) Gather neighbors and form a recall committee

2) Request membership list from the Association and a mailing list of all Board members.

3) Solicit signatures from members only (one signature per lot) on a petition to hold a special meeting for the purpose of recalling the Board of Directors and electing a new one (OR For recalling an individual director)

3a) While soliciting signatures, solicit for people to serve on the Board

4) Send the petition via certified mail to:

a) Registered Agent (if Association is incorporated) (original)
b) Management Company (send original here if there is no registered agent)
c) All Board members (copies)
d) keep a copy for yourself

In the polite cover letter sent with the petition cite any sections of the governing documents and State law that applies to calling special meetings and recalling the board (shows you've done your homework).

5) Wait an appropriate amount of time to see if the Board announces the meeting.

If Board does nothing send a second certified letter, with copies as outlined in step 3, stating that unless a meeting is held within x days (allowing time for notice requirements) and a notice of said meeting is sent within x days (say 10 days) that the recall committee will conduct the meeting.

5a) If the Board does announce the meeting, contact all members and solicit proxies if they are not attending the meeting (providing you can vote by proxy).

IF the committee has to hold the meeting:

6) Locate a meeting place

7) Set a date and time (be sure to comply with any meeting notice requirements)

8) Mail initial notice of meeting to all members

9) Solicit proxies if proxy voting is allowed

10) Mail reminder about meeting

11) Hold Meeting

AT the MEETING (no matter who calls it):

Confirm Quorum is present
Show proof of notice
Item 1 - recall of Board
discussion
Pass out ballots
Vote
Collect ballots
count
Announce result
Item 2 - election of new Board (if recall is successful)
Introduce nominees
Ask for nominations (if allowed from floor)
discussion
Pass out ballots
Vote
Collect ballots
count
Announce result
Send copies of minutes, sign-in sheet, vote count and results to registered agent, management company and all previous (if recall was successful) board members via certified mail. Set date for turn over of all records.

The reason you send everything via certified mail is to have a paper trail in case it turns into a legal battle.