Albert Lea American Legion Post officials said Monday an honest mistake is why the IRS has placed a tax lien of $11,065 against the club.

Manager Todd Utpadel said the club is in good shape and will have the debt paid in January.

“This is not a reflection of our ability to pay,” he said. “We have resolved it to the satisfaction of our board and to members who have inquired.”

A listing of state and federal tax liens is available to the general public at the Freeborn County Recorder’s Office.

He said the error comes from October 2008 to August 2009 when he was sending to the IRS payments for federal withholding taxes on club employees. He said the club maintains two payrolls, one for the banquet and lounge portion of the club and another for gambling. The club sells pull-tabs and holds bingo.

Utpadel said one payroll was labeled “total” and the other “gaming.” Being new, he mistakenly thought “total” meant the combination of the two. The operation’s IRS payments were underpaid for about 10 months as a result.The IRS has found no fraud was intended, Utpadel said, and a payment plan has been arranged.

Utpadel said he has been willing to be forthcoming with any members who ask him and is happy to show the payroll books. He, Cmdr. Rex Stotts and Adjutant Arnie Mulso said on Monday they are upfront because they don’t want false rumors circulating.

“This is not an Elks Club situation,” Utpadel said.

The Albert Lea Elks Lodge is in bankruptcy court following its collapse this year. One of its struggles was a black cloud of rumors over the past three years, with little done to quash them publicly.

Legion leaders said coming forward is the best policy. Utpadel added that so far this year the American Legion Post is profitable and is meeting goals for the banquet hall, though it is continually seeking additional events to host.

Mulso said the club has “vastly improved” since Utpadel became manager in March 2008.

Earlier this month, the Albert Lea City Council rejected the club’s request to install a $12,000 electronic message sign on its exterior.

Mulso said the money for the sign is separate from the workings of the banquet hall and lounge. The sign was to be the commander’s project, which comes from member donations. He said the money cannot be used for operations.

“The club and business are separate,” he said.

The commander’s project, he added, each year is for improving the property. The American Legion Post is at 142 N. Broadway Ave.

Stotts called the IRS lien “a clerical error.”

Uptadel said he takes full responsibility for the lien.

“This mistake, I made it. I missed it. Not commanders. Not adjutants. I made it,” he said. “The buck stops with me on that deal.”