Leachville Taking Small Steps to Pay Off Tax Debt

JULY 17, 2006 -- POSTED AT 10:00 P.M. CDT

LEACHVILLE, AR -- Months have passed since the City of Leachville began discussing how they plan to pay off their estimated federal tax debt of $400,000. For the years 2001, 2002, and 2003, the city employee's with held payroll taxes were not sent in to the federal government, but if the city is audited by the state and given a report each year, how was this detail overlooked?

"During the 3 exit conferences for those 3 years, nothing was ever mentioned that we were behind on those taxes. That was never discussed and they never found it," says Leachville Mayor Ralph Wells.

Wells also mentioned he felt that the IRS should have contacted the city during the years the taxes weren't being paid, instead of waiting 3 years down the road to give notification of the accumulated tax debt. He says the city didn't notice the extra money in their general fund account, but neither did the state or the IRS.

"Mainly what we need to know is the least amount of money that we can settle this issue with the IRS," says Wells.

The city council called a 'Working Meeting' Monday night to have open discussion regarding their tax problem and how they plan to negotiate with the IRS.

"Say we do a negotiation and we come up an amount that we have to pay $3,000 a month for "X" amount, we've got to adjust something to come up with $3,000 a month. We've got to cut a budget somewhere. We have no choice," says Alderman Bruce Wilson.

The city wants to hire someone qualified to negotiate with the IRS. Once they receive the final amount owed, they can decide how much more money they need to come up with to eliminate this tax debt.

Since tonight's meeting was only a 'Working Meeting,' they were unable to vote on any decisions. However, they did decide to place what was discussed tonight on the agenda the next 'regular" meeting. That was talk of budget cuts that they think could raise almost $109,000 to help pay off the IRS.