CHATHAM–The Village Board learned at the end of December that it will have to pay $18,112 in penalties to the federal Internal Revenue Service. The village received a letter from the IRS saying the federal government would not waive all the penalties imposed on the village for failure to pay federal payroll taxes.
The village has paid the IRS the $52,104.07 in payroll taxes it owed after the board reported last summer that the payments had not been made for several years. Village Treasurer Robert Patterson told The Columbia Paper December 27 that payroll taxes to the IRS, which are paid in part from employee wage withholdings and in part by employer contributions, were paid “sporadically.”
The $52,104.07 had been held in an account for payroll and disbursements, according the Village Board, so the funds were available but had not been sent to the IRS until recently. Over the summer, the Village Board was told that the village owed nearly $23,000 in penalties to the IRS. But Mr. Patterson asked the IRS to waive the fee and he says now the amount has been reduced to $18,112 for penalties and interest on the late payments.
“To date, the IRS has waived $11,930 in penalties that the current treasurer requested in a letter in June 2018,” Village Mayor Tom Curran read from a statement at the December 13 board meeting.
The Office of the State Comptroller conducted a risk assessment of village finances after the state office was contacted by Trustee Jay Rippel last summer. The Comptroller’s Office has not said whether it will conduct an audit of the village.
Village officials recently announced that the village owed over $47,000 to the state in unpaid payroll taxes. That money was also held in an account and was paid when the state made the village aware of the issue. The penalties on that could leave the village owing $25,000 to the state. The village is waiting to hear back from the state on whether those penalties will be waived.
The board changed its accounting practices after the missed payments were made public.
Payroll is no longer done in house and instead is now handled by an outside company. Also, the board appointed Mr. Patterson village treasurer in August. He was initially hired as village accountant in March 2018.
The previous village treasurer, Barbara Henry, resigned last summer.
The next regular board meeting is Monday, January 14 at 7 p.m. in the Tracy Memorial/Village Hall.
To contact reporter Emilia Teasdale email