Tax problems may force UCC to close doors

Greg Mellen

Jun. 18, 2008 (McClatchy-Tribune Regional News delivered by Newstex) -- LONG BEACH -- The nonprofit social service provider United Cambodian Community could be forced to close its doors if it is unable to pay back taxes by the end of the month.

On Wednesday, Executive Director Sara Pol-Lim revealed that the organization owes more than $57,000 in payroll taxes left unpaid by previous leadership. However, the group's attorney and certified public accountant, Glenn Howard, puts the number at closer to $60,000.

If the taxes are not paid by July 1 and the Internal Revenue Service refuses to budge on either the amount or allowing a payment plan, the nonprofit could be shut down as early as July 15.

Pol-Lim, who has been the executive director since March 2007, has vowed to make an all-out effort to raise the money and says she'll go door to door in the community if needed.

"I'm facing a mission to save UCC," Pol Lim said. "This is our urgent challenge."

Pol-Lim says that, before being waylaid by the tax bill, UCC had made gigantic strides in restoring its operations and, more important, its credibility in the community. Even in the face of the current crisis, she insists that her vision for the organization remains strong.

"We serve 1,000 people a month," says Raymond Chavarria, associate/project director at UCC. "So, you can see the need is there."

Although the situation is dire, Howard says the IRS will often work with organizations, but it can be particularly tough on cases involving payroll tax, part of which pays for Social Security and Medicare.

"Ordinarily (the IRS) won't shut down an organization if they can help it," Howard said. And in the case of UCC, there are few assets for the IRS to seize.

The back taxes date from the third quarter of 2005 through the third quarter of 2006 and add up to more than $50,000 before penalties and taxes of more than $28,000 were tacked on. UCC has so far paid off $21,000 of the debt.

"We're trying to get the revenue agent to put (UCC) on an installment plan," Howard says. "So far we haven't received a positive response."

That period of unpaid taxes corresponds with the final months of James Dok's tumultuous six-year tenure as executive director of UCC and the early portion of Dianne McNinch's time at the helm. Dok resigned in December 2005 and was replaced by McNinch, who served until Pol-Lim took over.

Dok says he was just trying to keep the foundering nonprofit afloat in his final days.

"We were aware (of the tax shortfall)," Dok said. "We were just trying to make it month-to-month to pay the staff."

Dok says he was hoping to turn the organization's financial prospects around and pay the taxes.

McNinch says she too was overwhelmed with debt and overhead costs needed to repair an apartment building the organization had to sell after it was bilked in 2005 of $500,000 in an investment in a medical spa company.

John Durocher was sentenced in 2007 to six years in jail on a 10-count complaint charging he fraudulently sold worthless securities to at least eight investors. Although restitution was required, UCC has not recovered any of its losses.

According to McNinch, digging out from the aftermath of the Durocher debacle was her first challenge and the loss of many of the organization's financial records further hampered her efforts.

"As soon as we were able, we started to pay the taxes," McNinch said.

In the final quarter of 2006 and the first quarter of 2007 under McNinch, UCC paid its payroll taxes.

"This was terribly mismanaged," Howard says. "But the current board I give lots of credit to."

Pol-Lim knew she might face financial hurdles when she took the job, but said she was working in the dark because of a lack of financial documents and records.

"I can open a book and see all the worms," Pol-Lim said, "but there was no book for me to open."

However, Pol-Lim thought the worst had been cleared before the latest revelation.

Pol-Lim is visiting with local politicians, business leaders and companies to rally support.

Fourth District Councilman Patrick O'Donnell says he has spoken with Pol-Lim and is ready to help, although he cannot provide city money.

"I'm always in favor of moving the Cambodian community forward, and I consider UCC an \ in the community," O'Donnell says. "(Pol-Lim) has rebuilt and rejuvenated UCC. They're for the community and I'm there for them."

To date, no particular events in conjunction with the city have been planned.

UCC is the smaller of the two primary Cambodian social service organizations in Long Beach, which has the highest Cambodian population in the United States.

In addition to after-school tutoring and drop-in and referral services, UCC runs programs concerned with youth development, such as its Proud Parenting program; community services, through the Cambodian Women's Health Network, food distribution and health fairs; and cultural preservation, through Arts of Apsara dancing, Khmer literacy and other events.

Pol-Lim says in recent months UCC has been increasing multicultural aspects of its services to bridge gaps between the Cambodian and mainstream communities.

Pol-Lim says her goal is to help assimilate an isolated people into the larger community and give it a sense of ownership in the community.

The rise and subsequent fall of UCC have been well-chronicled. At its height in 1993, UCC had $3 million in grants, according to tax filings, owned the United Cambodian Center on Anaheim Street and had branch offices in several communities.

Since then it has fallen precipitously through a series of missteps. Not only did UCC lose ownership of the United Cambodian Community Center, it was later evicted.

The Cambodian Association of America, which bills itself as the oldest and largest Cambodian organization in the nation, is now the main provider of social services to Cambodians in Long Beach, although it admittedly serves different segments of the community.

Although every executive director of UCC has blamed the group's problems on a previous regime, Pol-Lim says it is unfair to lump executive directors together and that she should be judged on her own merits and failings.

"I put my credibility and my reputation on the line," she says to taking the helm at the oft-troubled organization.

Pol-Lim says it will take a grass-roots effort to bail UCC out of its troubles.

"This is our last resort, to plead to the public," Pol-Lim says. "It's our mission to save our mission."

United Cambodian Community is a 501(c)3 nonprofit organization. Tax deductible donations can be made to UCC, attention Sara Pol-Lim, executive director, 2201 E. Anaheim St., #200, Long Beach, CA 90804. Information is available by calling 562-433-2490.

Newstex ID: KRTB-0107-26102846