Leachville Owes IRS $427,000

June 9, 2006--Posted at 6:15 p.m. CDT

LEACHVILLE, AR--The only things guaranteed in life are death and taxes. After the town of Leachville didn't pay taxes for several years the tax man has finally commeth.

"We are not broke. But our cash flow is in the situation, as far as having cash to pay the IRS and just write them a check, we are not able to do that," said Walter Crites of the Leachville City Council.

That's the situation for the Mississippi County town of Leachville, which is on the hook to the IRS for 427,000 dollars.

"I am dearly concerned about the IRS. I am concerned about the town and I want to get this issue over or laid aside, so we can look to the future," said Crites.

According to the Leachville mayor, the town didn't pay the IRS beginning around 1997. The real question is where did the money go that was allocated to pay the town's taxes?

"It's right here in this park, most of it. Some of it went to use getting a new bank in and a new dollar store in," said Leachville Mayor Ralph Wells.

During this time the city spent over 125,000 dollars building one of the nicest city parks around, because there was money in the general fund. There was money in the general fund because former city clerk wasn't paying the city's taxes.

"The city council voted to do these things, but at the same point, they didn't know they were spending IRS money," said Wells.

The town has tried to make up the money in a sales tax, but that was voted down by citizens. With Uncle Sam hovering over Leachville, the town is looking for alternatives.

"We got options of getting up some cash of our own. We also have the option of borrowing the money at 6.5 percent and paying it off over a 7 year period," said Wells.

Another proposed option is taking out bonds and paying off the sum over aset long term period. The IRS is willing to waive the penalties and fees, but as of now the town is still on the hook for over 200,000 dollars.

The town of Leachville wants to reiterate to residents that the town does have money, and will not have to cut services like fire, police, or other municipal services.