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Pacific Asia Travel Association

PATA in a pickle over what’s public

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Don Ross l TTR Weekly  Jun 02, 2008

Mr. Peter de Jong’s explanation is largely irrelevant, as the IRS disclosure rules state: “the organization must make its annual information returns available for public inspection without charge at all of its principal, regional and district offices during regular working hours.”

Pacific Asia Travel Association declared in an amended information return to the IRS, dated 20th May, that it operates offices in Bangkok, Thailand; Fremont, California and Australia.

It is also unclear whether the 1,000 plus members of PATA who reside mainly in Asia receive copies of annual financial statements before they are approved by the annual general meeting in April.

PATA’s honorary treasurer and a member of the executive committee, Hiran Cooray, claimed that the annual financial statement for 2007, with an invitation letter to attend the AGM in Colombo, Sri Lanka, were sent to all members, but shortly after making that statement, in an email to this publication, he reported that he could no longer confirm that point.

Non-profit associations are also obliged to provide an annual report and financial statements to all members before the financial records are approved by the AGM.

In the case of PATA, according to its own by-laws that were amended at its annual conference in Macau 17 April, 2005, the AGM “shall be held in connection with an Annual Conference held between the months of January through to May at such a place that has been previously designated by the members.”

A year later, contrary to those by-laws, PATA’s board of directors voted to discontinue the annual conference. It has since held two AGMs, in Vancouver, Canada and Colombo, Sri Lanka, that technically failed to meet by-law requirements. Those who attended, mainly members of the board, approved financial statements that were subsequently filed with the IRS.

It is understood that the association’s by-laws stipulated the AGM should be held in conjunction with an annual conference to encourage maximum member attendance.

Apparently omissions in the area of public disclosure were compounded by PATA’s admission last week that it had forwarded an amended return to US IRS to correct errors that were evident on its 2006 and 2005 annual statements to the IRS. The association answered questions 91b and 91c incorrectly.

The questions ask if the non-profit organization maintains a foreign bank account and overseas offices. PATA checked the “No” boxes for two years in a row on both counts.

Mr. de Jong, wrote to TTR Weekly stating that the association had submitted to the IRS the “most updated filing which does reflect current information for the latest filing year 2006.”

He noted that “the earlier filing… were inadvertently not updated in some of the particulars.”

He attached a PDF of the revised form 990 covering the financial year 2006 that states the association has overseas offices outside of the US in Thailand and Australia and bank accounts in these countries as well as Germany.

In a response to a follow up question he clarified: “It is a supplemental filing, it updates, but does not replace the earlier filing. Yes, we became aware that the 990 prepared by the accountants was out of date on some points and we chose to amend it.”

IRS rules allow an association to “file amended returns at any time to change or add to the information reported on a previously filed return for the same period.”

The association, which records a healthy revenue of US$3.9 million a year, is registered in California as a non-profit organization and has tax exemption status afforded associations under IRS category 501c 6 reserved for “business leagues.”

It is also officially recognized by the Thai government’s Ministry of Labor as “a foreign non-government organization with a registered office in the US and a regional office in Bangkok that serves a membership in Thailand, Asia Pacific and the Mekong region.”

Established in 1952, under state law in Hawaii, the association was subsequently registered in California and based its head office in San Francisco until it moved to Bangkok in 1998.

(end of a two-part series)

PATA in a pickle over what’s public
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