The Berkeley Daily Planet is facing ongoing difficulties and has been advised to refrain from engaging in any financial transactions, be it paying staff or accepting fees from advertisers.

Writing on the publication’s website today, publisher Becky O’Malley explains that, following a theft by a payroll preparer the company was using, attorneys have advised the Planet that it can no longer pay for anything until the extent of its tax liability is understood.

“The standard analysis is that every dollar that comes into the corporation has the IRS’s name on it until proven otherwise,” she writes.

In her column, titled “Where we are this week, and what you can do about it”, O’Malley says if they continued to sell ads or raise funds any other way, all of the proceeds would have to be held in reserve against the possible taxes owed. Nor can she and her husband, Mike O’Malley, start a new corporation using personal funds because it might be viewed by tax authorities as an effort to evade the responsibilities of the Berkeley Daily Planet LLC.

“So we’re caught between a rock and a hard place. And the really bad news is that it’s expected to take years for everything to be sorted out.”

Read the full report here.

Tracey Taylor is co-founder of Berkeleyside and co-founder and editorial director of Cityside, the nonprofit parent to Berkeleyside and The Oaklandside. Before launching Berkeleyside, Tracey wrote for...