After incurring multiple penalties last year, the City of Corvallis was granted $190,117.83 in refunds by the Internal Revenue Service.
To appease the IRS after late payroll tax payments, the city initially paid over $243,000 in penalties. However, after filing an appeal and submitting documentation, the IRS refunded a large portion of the fines paid, leaving the total amount paid at $53,444.53.
The penalties were the result of either late tax payments or forms that were not filled out in entirety over a three-year period. All of the payments were made, but some arrived several days after the deadline. Additionally, a former payroll employee ignored payment requests, further aggravating the situation.
The City satisfied both its tax payment requirements and additional form requirements but still owed some money for the tardiness of the payment and interest penalties.
To avoid further entanglements in the tax realm, the City had an internal investigation conducted and put more controls in place, which will take the form of an additional check made by an IRS contact outside the City’s payroll.
“I’m pleased that the IRS recognized the City’s good faith efforts to resolve this issue,” said City Manager Mark Shepard on the City’s website. “We did our best to acknowledge the errors while still pushing for an outcome that ultimately reduced the financial burden on the City.”