On Thursday, an agent with the Internal Revenue Service showed up at city hall without prior notification and asserted that Columbus owed the agency more than $50,000 in back taxes.
During the press conference that followed the regularly scheduled meeting of the City Council on Wednesday morning, Chief Financial Officer Jim Brigham discussed the current situation.
Brigham explained, “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.”
If those employee withholding forms were not submitted, an initial fine of $36,572.70 was imposed. However, the interest of $3,508.90 multiplied by the original amount into $40,081.60.
Because of the “check to write” policy of the city, Brigham was able to immediately pay the fine to the IRS without having to bring the matter before the city council first. Mayor Keith Gaskin and City Attorney Jeff Turnage were both complimentary of Brigham and stated that he behaved appropriately.
“The IRS agent was not going to leave without collecting,” says Brigham. “It was not going to happen.”
According to Brigham, the failure to pay would have resulted in a tax lien being placed against the city.
He says, “I’m not sure if they would have done a tax lien on our equipment or our property or whatever.” “I’m not sure if they would have done a tax lien on our equipment or our property or whatever.”
Brigham was given praise by Mayor Keith Gaskin for his role in preventing the city from having to pay a fine of approximately $15,000 by proving that the Internal Revenue Service (IRS) had incorrectly assessed the city with two other fines dating back to 2020 and 2021.
According to the Mayor, “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.” This has been the case for several years now. “And some of it is only now starting to come to light.”
Because the “check writes” process gave Brigham the ability to make immediate payment to the agent, he was able to do so before the formal approval of the city council, which was necessary because the payment was an emergency.
The city sent a letter to the IRS in 2021 laying the blame on former CFO Milton Rawle, who is currently serving a 20-year prison sentence for embezzlement. The letter stated that the city had sent the letter in 2021.
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“Just because a CFO is robbing you does not mean that he does not need IRS deadlines and other stuff,” says Brigham. “As a result, I need to conduct further investigation into the reasons why that did not take place.”
According to Brigham, there is currently no evidence that Rawle’s crimes were in any way related to the fact that the forms were submitted late.
According to Brigham, “(the letter) simply blamed him and then went into some detail on his criminal activities, which were irrelevant to this particular situation.” (The letter)
When he has more information about what caused those forms to be late, he intends to write his own letter to the IRS requesting that they reduce or waive the penalty.
