IRS investigates northeast Arkansas town - KAIT Jonesboro, AR - Region 8 News, weather, sports

IRS investigates northeast Arkansas town

By Amanda Hanson - bio | email feedback

GRUBBS, AR (KAIT) - A Jackson County town has fallen behind on it's taxes. Now, the IRS is investigating. It is a shock to citizens and the new Mayor, who now has to clean up the mess.

Last month, the town of Grubbs received a letter from the Internal Revenue Service. It claimed last year the city failed to pay 10-thousand dollars. Which town leaders says was a surprise to them.

"We didn't know that there was any problems. We knew that there were some back bills and that sort of thing. Then one day, we get a letter from the IRS," says Jackie Ivy, who is the new Mayor in the city of Grubbs.

A letter that indicated a federal lien against the city of Grubbs. The town owed money for three quarters of 2010, that added up to just over 10,000 dollars. Mayor Ivy, who just came into office this past January, says he's not sure what happened.

"Probably financial problems.  I don't know if it was just a matter of overlooking it or what happened," says Ivy.

Ivy, immediately contacted the IRS. "I asked what we could possibly do to postpone this thing, to give us some time to get our feet on the ground.  But they said we had to pay," says Ivy.

Soon after, the Mayor called a special meeting with the City Council, which voted to apply for 20-thousand dollar loan to pay back the IRS.  The bank approved the loan.  "We paid the balance to the IRS, and then we got hit with the forth quarter. I ask her how long we had to pay this and she said it's due and payable now," says Ivy.

All together the cost totaled roughly 15-thousand dollars. Ivy says they used the rest of the loan to finish payments on a deductible the city owed the school for damages sustained in a 2008 fire. Ivy says since he's been in office, he's already made cutbacks in city to help pay the loan.

"I just want the people to know that this IRS thing came about as a total surprise to us as anyone else, that we got the money, and we paid it off. It's taken care of and we're in good shape," says Ivy.

Ivy expects the cuts that he has made will help save the town nearly 20-thousand dollars a year. And adds, does not anticipate any rate increases for citizens.

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