Back in 2013 I was the president of a licensed non-profit operating in Massachusetts. We fell behind on payroll and we were reported to the Attorney General's office and both myself and the treasurer were to be cited by that agency. But the treasurer's husband "donated" $50,000. to us from an account listing only himself as an owner and we were able to cover all of the payroll. And only I as the president was cited. This money was donated not loaned and the couple were given a charitable donation letter which they used to take a deduction off their 2013 taxes. Then in 2015, I along with another member of the administration, received notice that a civil suit had been filed against us by the treasurer for restitution of this money. However, her husband is not a part of this suit. She contends that she never "authorized" any such donation. But curiously, she did sign her income taxes that year which means that she most certainly was aware of the donation! We have retained an attorney but he thinks we should just settle. However, it is important to point out that this couple has not amended their taxes nor do they have any intention of doing so. This means they enjoyed the benefits of a large charitable donation and will now be putting money into their pockets. This has to be illegal and against the IRS code or at the very least she must be guilty of filing a fraudulent civil suit. In addition, if we do settle, would this in any way make me culpable to IRS fraud as I signed the original letter for $50,000. and if we give them $25,000. this would mean that letter is false. Anyone who can please give me sound advice would be most appreciated!