CHATHAM — The village owes the Internal Revenue Service a principle amount in taxes of $52,104, most of which were more than a year overdue, plus associated penalties and interest, officials said.
The village put out a statement Aug. 17, announcing village accountant Bob Patterson found statements from the IRS that showed the village owed the IRS the principle amount of $52,104, an additional $2,333 in interest and $22,986 in late penalties.
Patterson is the new village treasurer after former treasurer Barbara Henry resigned. Henry submitted her resignation July 26 to go into effect Aug. 24. Patterson was appointed by the board as the new treasurer Aug. 17.
“Patterson advises us that, to his knowledge, those funds were not missing, but would have been held in the agency account for payroll and disbursements,” according to the statement from the village. “Thus, they do not constitute a new or unexpected cost or burden to the village. The issue in regard to the principal amount of $52,104.07 is one of timing, not amount. Much of this has now been paid.”
Mayor Thomas Curran refused to say how much the village paid of the principle amount owed.
The village received multiple notices July 16 from the IRS about owed taxes.
The village owes $27,208 from Dec. 31, 2016, which included $11,289 in penalties and $2,100 in interest, according to the IRS notices. The village owed $26,214 from March 31, 2017, but paid $24,752 — leaving a principle amount owed of $1,462. The notice also shows $8,999 in penalties and $649 in interest.
The village owes $23,433 from March 31, as well as $2,694 in penalties and $248 in interest, according to the notices.
Village officials are trying to have the IRS waive its late penalties, according to the statement from the village.
“The usual grounds for waiving the penalties, I believe, is that it was an error, and was not a deliberate non-payment,” Village Trustee Mike Wollowitz said. “It appears to be a mistake and nothing indicates it was anything other than a mistake.”
A payment of $4,565 with $34 interest was due Dec. 31, 2017, according a notice from the IRS.
“The [IRS] statement does not specify whether the amount is the tax amount outstanding or also includes penalties,” according to the village’s statement. “The village, through its accountant, is working with the IRS to verify the correctness of the IRS claims and to pay tax amounts and interest actually owed, and is seeking to obtain a reduction or waiver of the penalty amounts. To the extent the IRS statements are correct, the village is also working to determine how and why required payments or filings were not timely made.”
The village is waiting for confirmation about the $4,600 on account and what it is, Wollowitz said Monday.
Patterson has found other possible discrepancies in record-keeping documents, but they have generally not exceeded amounts in the hundreds of dollars, according to the village’s statement.
Curran declined to comment on the discrepancies outside the village’s statement.
“The amounts that were found were not in the right accounts and we are sorting it out,” Wollowitz said. “These were bookkeeping errors that should have been corrected faster than they were. We were playing a bit of a game of catchup.”
An auditor from the Office of the state Comptroller visited village offices for four days in July, according to the village’s statement. Representatives from the comptroller’s office may return depending on the preliminary review for further inquiry, including an audit.
“These are not things the board looks at constantly and these fell through the cracks between the previous accountants and the treasurer,” Wollowitz said. “It is a weakness of the board that we do not have a trustee who is an accountant or bookkeeper.”