IRS sets new deadline for Sulphur Springs to pay up

SULPHUR SPRINGS -- IRS gave city officials until April 16 to find flaws in the city's bookkeeping system from 2011 through 2013 and pay up, or face placement of a lien on the city's assets.

"We owe at least a year's worth and maybe five quarters of payments to the IRS," Mayor Greg Barber wrote in a note to the city's council members. He said he spent at least an hour on the phone last week talking to an IRS representative about the city's overdue amount.

After a phone conversation with the state's auditor last week, Mayor Barber reported the auditor had not found any evidence of previous administration filings of quarterly 941 employee tax withholding forms from the second quarter of 2011 through first quarter of 2013.

"For the second, third and fourth quarters of 2012, and first quarter of 2013, the city has not paid anything to the IRS," Barber said in a note. "The second and third quarters of 2012 are okay, with a balance due of $1,700," he added. "The fourth quarter of 2013 we are still evaluating. We found the 914 form filled out, but we are still looking for money transferred or sent to IRS," Barber said, noting that the city clerk had not located any records of payments.

In his note, the mayor apologized to the council for his now-known premature statement at the March 13 regular council session.

"I told you a lie in the last council meeting," he wrote.

He said that, in February, he saw the previous administration had not made all IRS payments when due. He had then called the IRS. The IRS had then sent a bill of more than $2,000, which he said the clerk had paid. That had prompted him to say, during the March meeting, that city "bills owed to the IRS and State Revenue taxes are current." With the revelation from last week's state auditor report, this was not true, he explained.

The city's clerk, Jamie Friend, told Mayor Barber about the phone call she had received last week from the state's auditor. Friend said the auditor told her the reason the state had sent her to audit the town's books early was because of outstanding debts with the IRS, according to the mayor's note.

This is not the only previous administration problem which Mayor Barber has had to face. Since Barber volunteered to serve the residents of Sulphur Springs as mayor late last year, O'Reilly Auto Parts has threatened to discontinue credit for 2012 and 2013 past due bills of almost $800, and the police and firemen's retirement fund was in arrears more than $2,000. With these paid in full, the mayor thought the city's financial condition was in a better position than when he took office. However, the latest IRS interest and penalty charges might make those past-due bills seem like small potatoes.

"We have not found anywhere in the office a letter from the IRS stating we owed them anything else. They [IRS] said they have sent numerous letters and were ready to place liens on the city next month for nonpayment," Mayor Barber wrote.

After the mayor spent an hour on the phone last week with IRS representatives, the IRS gave the city a new deadline of April 16 to get caught up or else.

General News on 04/02/2014