A PRICE for Board Service

Introducing guest author, Stephen Tatum, Partner and Attorney with Cantey Hanger, LLP.
Service on tax-exempt boards is attractive to the public for a number reasons, allowing us to give back to our community. Most never think of potential liability arising from such service, or are satisfied that state law provides adequate protection for members of tax-exempt boards who act in good faith. The United States Court of Appeals for the Fifth Circuit recently affirmed a decision from a Federal District Court in Beaumont that could cause many members of tax-exempt boards to have second thoughts. The February 26, 2009 opinion on Verret v. USA, should provide individuals considering board service a new set of questions that should be answered before agreeing to accept a board appointment.

The facts in this case are important both for the purpose of demonstrating why the Court held the board chairman personally liable for payroll taxes unpaid by the hospital he served as chair of its board, and so that others can evaluate their own potential for liability in this situation. Read the rest of this entry »