IRS to hold Q&A on Blytheville audit - KAIT Jonesboro, AR - Region 8 News, weather, sports

IRS to hold Q&A on Blytheville audit

BLYTHEVILLE, AR (KAIT) - Blytheville residents will have the opportunity to question the IRS Tuesday.

Deputy legislator June Barron from the Arkansas Legislative Joint Auditing Committee agreed to go to the Ritz Civic Center in Blytheville at 6 p.m. to explain the audit of the city's financial reports in 2009 and 2010 that claims Blytheville owes the Internal Revenue Service more than $3 million.

Retired Blytheville school teacher Tobey Johnson said what Barron says at the meeting will determine whether she supports a 1-cent sales tax increase to pay off the debt. "I'm all for whatever it's going to take the city to get out of the predicament that they're in, but by the same token, there's got to be accountability for the mess that we're in."

The independent auditor's report says that the "Offices of the Treasurer, City Clerk/District Court Clerk, and Police Chief were in substantial compliance Arkansas fiscal and financial laws. Noncompliance with state law and accepted accounting practices was noted in the Offices of Mayor and Finance Director."

The mayor of Blytheville in 2010 was Barrett Harrison. The city finance director was Faye Griggs.

The audit accounts for finances in the city's general fund, street fund and several other funds since December 31, 2010. The report says:

"The City failed to properly file IRS Form 941 and remit federal tax payments in 2009 and 2010, except for the second quarter of 2010, and had minor discrepancies in the amounts reported and remitted for 2004 through 2008. An IRS notification to the City reflected $3,765,894 due as of September 1, 2011 including unpaid taxes of $2,344,004 and additional penalties and interest of $1,421,890."

Payroll clerk Stephanie Thompson faults the former administration for the debt, but also questions why the IRS took several years to collect the debt. "I know how tedious it can be and how sometimes you can be late on your payroll taxes, but this long amount of time, there's no excuse."

"I think the IRS let it go this long so they could collect the penalties off of it," she said.

Blytheville mayor James Sanders said he made the unusual request for an auditor to come to Blytheville to explain the report to reestablish trust in city government and disseminate accurate information before the sales tax increase vote in March.

"Everyone across the state understands my issue with the taxes and we're now in hopes that what we're going to be able to do is to pass that tax, and I'm just trying to get as much information out the public, and I mean correct information. Not where I guess or anything because they're getting it directly from the agency."

The vote on the 1-cent sales tax increase is Tuesday, March 13.

Region 8 News will continue to track this story and update you as more information becomes available.

Arkansas Legislative Joint Auditing Committee Report

Copyright 2012 KAIT. All rights reserved.

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