Columbus pays IRS close to $40K fine after city submitted tax documents late in 2017
COLUMBUS, Miss. (WCBI) – Thursday, an agent with the Internal Revenue Service showed up without warning at city hall, claiming that Columbus owed the agency more than $50,000.
Chief Financial Officer Jim Brigham discussed the situation Wednesday morning during the regularly scheduled post-city council meeting press conference.
“We did have one large, outstanding fine that came out in 2017, where we failed to, on a timely basis, report to the Social Security Administration, both the 1099 and the W-2s,” Brigham explained.
Failure to submit those employee withholding forms carried an initial fine of $36,572.70. But the interest of $3,508.90 turned it into $40,081.60.
“The IRS agent was not going to leave without collecting,” Brigham says.
Brigham says that failure to pay would have led to a tax lien against the city.
“I’m not sure if they would’ve done a tax lien on our equipment or our property or whatever,” he says.
Mayor Keith Gaskin praised Brigham for saving the city roughly $15,000 by proving that the IRS mistakenly hit the city with two other fines from 2020 and 2021.
“I think we’ve been very clear for quite some time that there were some major issues that the city’s been facing financially for several years,” the mayor says. “And some of it is just now coming to light.”
Brigham was able to pay the agent immediately through the “check write” process, which allowed him to make an emergency payment before formal approval by the city council.
The city sent a letter to the IRS in 2021 that placed the blame on former CFO Milton Rawle, who is currently serving a 20-year prison sentence for embezzlement.
“Just because a CFO is stealing from you doesn’t mean he doesn’t need IRS deadlines and stuff,” Brigham says. “So I have to do more research on why that didn’t happen.”
Brigham says there is currently no evidence that submitting the forms late had any connection to Rawle’s crimes.
“(The letter) simply blamed him and then went into some detail on his criminal activities, which were irrelevant to this particular situation,” Brigham says.
Once he finds out why those forms were late, he plans on crafting his own letter asking the IRS to reduce or eliminate the fine.
“In talking with the Internal Revenue Agent, I believe that we’ll be able to write a more thorough letter on why that happened and hopefully we can get them to reconsider their denial of that abatement,” Brigham.
Brigham says he plans on sending his letter requesting an abatement within the next few weeks. In spite of all of this, he remains hopeful that the city can right the financial ship.
