Throughout most of its 78-year history, the annual membership meeting at the National Independent Automobile Dealers Association Convention has been a pretty innocuous affair, including discussions about bylaws, recognition of the previous year’s officers and an election that has usually been a foregone conclusion.

This year, though, is likely to be different. When the meeting takes place June 17 — the opening day of the four-day convention at the Wynn in Las Vegas — a thorny and potentially contentious issue is expected to be on the agenda, involving president-elect Michael Darrow.

On April 16, Darrow’s wife Carol pleaded guilty in federal court to a charge of willfully failing to collect or pay over tax, a felony that can carry a prison sentence of up to five years.

While serving as controller for The Auto Finders — the Durham, N.C., independent dealership co-owned by the Darrows — Carol failed to remit $346,775 in withheld employee payroll taxes to the Internal Revenue Service over a span of five years, from 2016-2021, according to a news release issued by U.S. Attorney Michael Easley’s office.

Michael Darrow, who was not charged, said in an email interview he knew nothing of the tax issue until the day of the guilty plea, when his wife called to tell him she was on the way to court and explained the situation. He said he was not contacted by the IRS or the U.S. Attorney’s office during the investigation, which was presented to the court in November.

The U.S. Attorney’s office and IRS both declined to discuss the issue, saying they are prohibited by law from commenting on an investigation.

Sentencing is scheduled for the week of July 9. Darrow said Carol is not likely to get prison time, as the company repaid the IRS on April 26.

“Prosecutors have said they will not push for jail,” he said. “They just want to be paid. After she explained the situation in court it was understood this was mismanagement, not a scam.

“This was an alignment of epic failures that caused this situation to reach the level it did. Certainly not an intention to ignore facts by the IRS, our accounting firm, and certainly not in the oversight of financials by myself. It is human error brought about by embarrassment and emotions of a good and qualified employee who made a serious mistake.”

But that is far from the end of the story.

As president-elect, Darrow is scheduled to automatically ascend to the position of president during the association’s membership meeting, according to the NIADA bylaws. That has raised concerns among NIADA members — including members of the board of directors — about what that would mean for the association and the used vehicle industry, which has always struggled with reputation issues.

“I like Michael Darrow. He’s been wonderful to me. But this is not about Michael Darrow. This is about the face of NIADA,” said Jack Carter, owner of Turn & Burn Motors in Conyers, Ga., one of several dealers who expressed similar sentiments (others declined to be identified). “We’re constantly trying to overcome the perception out there about used car dealers, and this feeds into that.

“What it really comes down to is representing the dealers. Our very first job is to represent car dealers, and the job of NIADA is to communicate with and educate legislators on behalf of dealers. And I feel like this situation could hinder our progress with legislators. You want somebody whose reputation is unquestioned. And I’m not saying that’s me. But it’s just not Michael Darrow. Not right now.”

Those concerns about the optics of a dealer whose business has just been in trouble with the IRS serving as president of an association representing independent used car dealers — regardless of whether he was personally involved — have led to calls for Darrow to step down from his position as president-elect and hand the presidency to someone else for the 2024-25 term.

“I think the good of the association should come above all else,” said a dealer who asked not to be identified. “I can’t speak for Michael, but if I was in that position, with my love for the industry and for the association, I would step back and say, ‘Guys, let me get this worked out, and I’ll throw my hat back in the ring at another time.’ ”

But Darrow has no intention of doing that.

“I have not been charged or accused, nor have I done anything wrong,” he said. “I feel comfortable and confident going forward. We have much to do at NIADA and we need strong leadership now, in order to push the agenda forward. It’s time to get NIADA back to the 900-pound beast it once was and can be again.”

Those opposing positions are setting up a first-of-its-kind showdown for NIADA. According to the bylaws, a member of the board can be removed from office only by a vote of the association’s members — and it appears that scenario will come into play during the membership meeting at the convention.

There are multiple possible scenarios for a process to make that happen, according to NIADA officials. In one, a motion can be made from the floor to call for the vote before the new slate of nominees for the board positions is presented for election. If the membership votes to remove Darrow from his post as president-elect, the board would appoint a new president-elect, who would then become president minutes later when the new board is voted in.

“There’s a lot of moving parts to this,” current president Gordon Tormohlen said. “This is an important issue, and the only thing I can really tell you is the board is aware, and we’re being proactive.”

If a vote comes, Darrow’s fate will be decided by NIADA’s affiliated state associations, who will represent the association’s 13,000-plus members. Each state association gets one vote for every 50 members, which makes the largest of them – Georgia, Texas, Florida, the Carolinas, Virginia, Colorado, Mid-Atlantic, Ohio and Alabama — crucial in determining the outcome.

Georgia IADA executive director Amy Bennett said the members of her association, the largest by far, will decide on-site how the state will vote.

“We’re going to wait to hear him out at the meeting and then we’ve been given the OK by our board to take our vote from there,” she said.

Darrow said that’s how he hopes NIADA members approach the vote.

“I was elected by the membership, the dealers,” he said. “I would like for them to hear the whole story and then allow them to make a decision on my future with NIADA. I will abide by my peers’ decision.

“The bylaws are pretty clear. Senior board members are elected by the membership and endorsed or taken out of office by the membership. I think this is the way it should be and will respect their wishes at the conclusion of the membership meeting.”

Colorado IADA CEO David Cardella said his board also wants to hear from Darrow “in person” before committing.

“We voted to give the board members in attendance the power to make the decision,” he said. “They see both sides of the issue, but they are concerned about the look for NIADA regardless of how this turns out.”

Ohio IADA’s board has made a decision about what OIADA will do — tentatively.

“Our board has met and has determined our vote based on the information we have at this moment,” executive director Wendy Rinehart said. “We have also given the delegates at the member meeting the power to change that vote upon new information.”

“I will say,” Rinehart added, “I am disappointed and concerned about the perception this could bring to NIADA.”

For his part, Darrow isn’t shying away from his dealership’s IRS issue, which he said came about because the company was short on funds one quarter and his wife “thought she would make it up next quarter. The next quarter was twice as much, then three times and four times and it snowballed. She was scared and ashamed and kept it from me as the problem only got worse.”

He said he and his accountants missed it because the correct forms were filed every quarter even though the funds — about $5,780 per month over five years — had not been paid.

“Our industry is accountable to so many regulators — DMV, CFPB, state attorneys general, FTC, dealer boards, IRS and bank auditors just to name a few,” Darrow said. “No other industry has so many regulators to answer to. Keeping all the plates spinning and not dropping one is an incredible job.

“My situation is a great learning opportunity for our members and also a microcosm of what many dealers have experienced themselves with regulators. You can perform absolutely spot on for 28 years as we have, without any blemish with any regulators. In our community we are a highly respected business and give much of our time, talent and treasures. Those who know me know I am an honest man and a servant to our industry.”

Whether Darrow will serve as NIADA’s next president remains to be seen — and will likely be up to the association’s members when they convene two weeks from now in Las Vegas.