We recently discovered that our Treasureer for the 2005-2006 and 2006-2007 school years did not file a tax return. He was always on track with treasurer's reports and everything else. He told the board he had filed taxes. I even gave him the forms and instuction book the second year. We had no reason to doubt him.
Then when it came time for an audit at the end of 2007, he kept delaying and finally admitted he "lost"all paperwork. Finally , later it was discovered when he told his wife he lost info. she has told him she had put into storage thinking he was sone with it.
So, audit went well, but he now admits did not file return!!!

What do we do at this point. File with an explanation to IRS? Has anyone else been through this?