NCRS IRS Audit Information

[John T.]

March 20, 2025

IRS Audit of NCRS

Coincident with the resignation of the NCRS President in January 2023 and her charge that NCRS had been filing fraudulent tax returns, someone filed a whistle blower complaint with the IRS making similar charges.

That whistle blower complaint triggered an audit of NCRS which lasted almost a full year and examined in detail over 12,000 transactions.

As best we can determine, the reason for the depth and duration of this audit was the IRS examiner’s acceptance of the whistle blower complaint’s charge of fraudulent behavior on the part of NCRS, and the examiner’s determination to find it.

NCRS Financial Officer John Tidwell and his wife Sophia spent months and months responding to the IRS examiner’s numerous requests for NCRS financial records.

John just received the final letter from the IRS finding that there was no fraud and no filing errors, and the returns were accepted as filed.

In fact, the senior agent advised John that he may have been slightly conservative in two of his allocations and there is a small refund available.

As an aside, the Department of Labor subsequently denied whistle blower protection to the letter writer.

The total cost of the litigation resulting from the President’s resignation in January 2023 and this IRS audit was $196,000 in legal and accounting fees.

We thought the NCRS membership should know.

John Tidwell
NCRS CFO

[Brian M.]

Thank you for sharing this John.
I know this has come up from time to time and your post should hopefully put it to rest.

[Mark F.]

Thank you John for all the work you and your wife had to do on this - and for sharing this with us on TDB and in the ZOOM BoD meeting video that I watched.

Unbelievable that you, your wife and NCRS was forced to go thru this both from emotional and extreme financial burden standpoints.

[Harry S.]

John & Sophia, excellent on your part as usual!

Thank you

[Michael J.]

Thank you so much John, for so openly exposing this situation and the resolution of same. We can all learn a lesson from this, even though it was an expensive and frivolous complaint.

[Tim G.]

Thank you for the update, John. Thanks to you and Sophia for the time you put into this audit.

[Mike M.]

196K down the drain due to a whistleblower who the IRS found at fault. is it legal for NCRS to sue the whistleblower for the 196K? John and Sophia deserve a medal. thanks for all you two contribute to the club. mike

[John S.]

Thank you John and Sophia! Thanks also goes to the entire board for leading this organization through an awful experience.

Since the whistle blower protection has not been allowed, does the NCRS have any legal standing with suing Said whistle blower for 196k in damages to recoup our losses? That is quite a hit for a small organization like ours!

Keep up the fight!

[Sherri D.]

Not surprising that the IRS found that the taxes were filed correctly and actually we overpaid. Thanks John and Sophia for all your hard work over the last year to prove the whistleblower filed a frivoulous complaint and knew zero about tax filing. If there is anyone in this club that keeps a close eye on our funds it is John. I agree with Mike McCagh, we should pursue recouping the $196K from the whistleblower.

[Harry S.]

Not surprising that the IRS found that the taxes were filed correctly and actually we overpaid. Thanks John and Sophia for all your hard work over the last year to prove the whistleblower filed a frivoulous complaint and knew zero about tax filing. If there is anyone in this club that keeps a close eye on our funds it is John. I agree with Mike McCagh, we should pursue recouping the $196K from the whistleblower.

Yes, as well as our attorney fees to recover the $196k

[Steven B.]

Thank you for the update John. Thanks to you and Sophia and all involved in these actions representing NCRS. I agree with Mike. If we have recourse to recoup the expenses we should pursue. Thanks John, Sophia and all. Steve

[Gary C.]

Agree, it would be good to get financial restitution for the funds NCRS spent for the so called whistleblower frivolous and malicious claims.

However, how do you get blood out of a turnip.

What's done, is done. Time to more forward.

JMTCW.

Special thanks to John and Sophie for all their hard work at bringing this to an end and successful resolution for NCRS!

Gary
....

[Mark F.]

Agree, it would be good to get financial restitution for the funds NCRS spent for the so called whistleblower frivolous and malicious claims. However, how do you get blood out of a turnip. What's done, is done. Time to more forward. JMTCW, Gary ....

Gary,

Painful, but I agree and I think government whistleblower protections (I know they exist and are quite robust in the DoL at least for OSHA complaints) would be limited. OSHA would probably call such actions as retaliation.
Plus any settlement agreements could also probably preclude future attempts at restitution...

[Mike L.]

Thank you, John & Sophie for ALL your hard work not only in this matter. We may never see the money again but for those who had any questions about the false IRA issue, it's in black and white now.

[Michael H.]

Thank you John and Sophia for your hard work and dedication.

Mike