Re: [Cz-L]Gary Rogovin CPA re: setting up of a Traian Popovichi Plaque fund

Miriam (Mimi) Taylor <mirtaylo_at_indiana.edu>

Dear Gary,

Thank you for your detailed explanation of the possible ways
of handling the collection and disbursement of money for
the Popovici plaque. It is most helpful.

I am working on all aspects of this project and expect to have
preliminary but extensive results, in the next few days.

Mimi

> 6-16-08
>
> Dear Miriam and List members,
>
> My name is Gary Rogovin. I am a list member and a CPA.
>
> In repose to Miriam Taylor's 6/16/08 request for guidance, I would like to
> discuss the issues of the setting up of a Traian Popovici Fund bank account to
> receive contribution funds and disburse checks to pay for the expenses related
> to the design, construction and installation of the plaque.
>
> Issues:
> 1) it makes no sense to set up a "business" or a "non-profit trust" account.
> There is too much paperwork and too many reporting (Federal, State, etc.)
> requirements for setting up and maintaining an entity. Even the mere setting
> up of a bank account using a name such as "TP Memorial Plaque Fund", would
> require the filing of a "DBA" and/or a "Fictitious Business Statement".
> 2) Miriam Taylor expressed her concerns regarding receipt of checks in foreign
> currency, the number of checks that might be received, the possibility that
> the IRS and the Department of Homeland Security (DHS) would respectively
> detect and track account activity for purposes of under-reporting of income
> (IRS) and fear of money laundering to support terrorist activity (DHS), the
> possibility that any individual who has control of the cash account could
> either become unable, due to accident, disabling injury or death, to perform
> their responsibilities with respect to the account or even abscond with the
> funds.
> 3) logistics: will the bronze or marble plaque be produced in the US or in
> Europe? if in Europe, who and how on behalf of the CZ group, would approve the
> final result which would serve as authorization to make payment to the Artist
> and the materials supplier(s)? or would we have to depend upon someone in
> Chernivtsi, to be our eyes and make the determination that the finished plaque
> meets all the approved specifications of design and material as put forth by
> those in the CZ Group who are designated as having responsibility for that
> function?
>
> My recommendations are as follows:
> Issue # 1 Bank account:
> The account could be in the name of one individual. Appearing on the line
> directly under that person's name on the check could be the wording "Traian
> Popovichi Memorial Plaque Fund", so that the recipient of the check (artist,
> sculptor, materials supplier, government agency for issuing permits, etc.)
> would know the specified purpose of the payment.
> There should be at least four authorized signatories, any two required
> simultaneously for the issuance of any check, with the others as backup in the
> event of illness, incapacity or death of either or both of the primary
> signatories. The two simultaneous required signatures on every check, serve as
> a protective mechanism for both the fund donors and the account holder, a
> system of checks and balances. The person who writes the check would forward
> the signed check, along with the documentation supporting the purpose of the
> check, to the second person for signature. This gives the second person the
> opportunity to review the appropriateness of the check for: payee name, amount
> and purpose of payment and in effect, serves as a second review and approval.
>
> The main issue with the second required signature is one of geographic
> logistics. Because this fund will involve a small amount of money on a
> comparative commercial scale, it is extremely unlikely that any bank would
> provide "digital' signature service, wherein two or more persons in different
> geographic locations could "electronically" approve (sign) a withdrawal
> (check) written against the account in favor of a specific payee and transfer
> the funds electronically to the payee's account. Therefore the use of the mail
> would be necessary.
>
> Example: "A" 1) prepares the check, 2) signs it, 3) prepares a pre-addressed
> (to the designated payee) postage paid envelope and 4) puts the check, the
> pre-addressed postage paid payee envelope and a copy of the documentation
> supporting the payment, in another envelope and mails it to "B" for the second
> signature. "B" reviews the documentation for appropriateness of purpose and
> payment amount, makes sure the name and address of the payee is correct (based
> on the documentation), then signs the check and mails it in the enclosed
> pre-addressed postage paid envelope, along with the copy of the documentation,
> to the payee.
>
> Because there will be mail transit time between "A" and "B", as well as from
> "B" to the payee, this "mail transit time" has to be considered by "A" in
> determining the date that "A" needs to begin the mailing process so that the
> payee will receive timely payment.
>
> Issue # 2
> In my opinion, the deposit and check amounts, the account balances involved
> and the small number of individual transactions, would not trigger scrutiny by
> the IRS or Homeland Security. Banks are generally required to report a
> transaction of $10,000 or more, or cumulative transactions in a given day
> between the same parties totaling $10,000 or more. In any event, there is no
> illegal activity involved here and therefore no need to worry. Should for
> whatever reason there be a government inquiry, it can easily be explained and
> supported by proof (documentation).
> The two signature check requirement addresses and puts in place a control over
> the possibility that any individual who has control of the cash account could
> either become unable, due to accident, disabling injury or death, to perform
> their responsibilities with respect to the account or even abscond with the
> funds.
>
> Issue # 3
> Once the approval for the final design (whatever it may be) and the location
> for it in CZ has made by the Chernivtsi government, I would personally prefer
> to have the plaque made in the USA, mainly for the purpose of better control
> over its production and cost. How that could be worked out while using an
> artist in CZ to do the renderings, I am not sure. If the CZ Artist/Sculptor
> would be involved in not only the making of the plaque, but also in trying to
> expedite the Chernivtsi government approval process of both the final design
> and the display location, the cost of the plaque would reflect his involvement
> in those processes. However, in all probability, it would still cost less in
> total then to make it in the USA. In adition, he might not be receptive to
> non-involvement beyond the design stage and thus someone else would have to
> carry the ball with the City government approval process, perhaps Maita Prout
> could do that if necessary as Marianne Hirsch touched upon in her 6/3/08 e
> mail to the list. I think that this issue would be best left to a committee
> that could include Miriam Taylor, Marianne Hirsch, Florence Heyman, Leo
> Spitzer and Cornel Fleming, assuming all are willing and able to volunteer
> their time to this project. The latter four, having recently returned from CZ,
> have been to the mountain top, met the people and are the most informed on
> this issue.
>
> Sincerely,
> Gary Rogovin

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Received on 2008-06-17 12:54:48