Nelms addresses quorum court members about IRS debt

JONESBORO, AR (KAIT) - Craighead County Clerk Nancy Nelms addressed quorum court members Monday night. A special meeting was held in which Nelms explained what happened to put the county in debt to the IRS. It was recently discovered that the county had been in debt $288,264.20 in back taxes and fees.
"I was not prepared with all the answers that I wanted to give to the court when it was first brought to your attention," she said.
Nelms read from a letter she had prepared explaining in detail what happened. Nelms said she was first made aware of the issue by an IRS Representative on February 21, 2012. He said liens could be placed against Craighead County properties if the nearly $300,000 in debt wasn't paid to the IRS by March 2nd. The money owed was a result of tax penalties and fees over a six year period from 2003 to 2009.
"He explained that I could still go back to the years that were mentioned and if I could produce evidence some of the penalties would be refunded," Nelms said. "He encouraged me to work on them and let him know by the first of March if the county wanted to go ahead and to pay to avoid further penalties and avoid having a lien placed on Craighead County."
From there, Nelms and Craighead County Judge Ed Hill worked to solve the problem.
On February 29th, Judge Hill signed a county court order telling the treasurers office to write the over $288 thousand dollar check to the IRS. The order also stated that a former bank account would contribute to the debt.
"Was used for payroll tax withholdings only... had been closed last year and that $117,516.59 had been deposited into general funds and this amount would go toward the payment," Nelms explained.
The order also stated that with proper paperwork, most of the penalties could be taken care of.
Nelms then called the IRS representative and told him they had the full amount.
She said she wasn't aware there was a problem until that IRS agent showed up in February.
"Over the years we've received refunds for overpayment which led me to believe the problem had been corrected."
Yet has no explanation as to why the problem was overlooked in the first place
"There's no excuse for poor record keeping. I try to take care of too many things at once," Nelms said.
After Nelms finished her account of what happened, quorum court members merely wanted to know why this happened.
"Nancy, I mean, if this was once or twice or something I could understand," Justice Kevin Hoke said. "But once out of the last seven years we've been in compliance." 
Nelms replied saying there were a number of reasons why this could have happened.
"I have those reports out every year and no one has addressed me about the problem until now," she said. She added that poor staffing and changing computer programs over the years didn't help.
Nelms did say that at this point, Craighead County does not owe any penalties or fees to the IRS.
Craighead County Judge Ed Hill spoke with Region 8 News after the meeting. He said quorum court members will decide what steps they plan to take at their next quorum court meeting on Monday, May 14.
Region 8 News will continue to track this story and bring you the latest developments as they become available.
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