JONESBORO - The Internal Revenue Service has refunded more than $130,000 to Craighead County after officials negotiated a settlement for penalties and interest accrued for nearly 10 years of mistakes in payroll taxes.
“I am glad this chapter is over,” said Craighead County Clerk Kade Holliday, a Green Party candidate who took office in January after defeating longtime Democratic incumbent Nancy Nelms in the November general election. “I can have a sigh of relief and finally begin working on2013.”
The county received a check from the IRS for $131,637.17, which was placed in the county’s general fund, Holliday said Thursday.
Last year, the IRS said the county owed $333,000 in unpaid payroll taxes from 2004-11, along with penalties and interest. Nelms worked with IRS officials, and the county paid $245,000 after negotiations.
Nelms said last year that she took the blame for some errors but added the IRS “likely had faults, too.”
Other Arkansas towns have run afoul with the IRS over back taxes in the past few years.
Bauxite and Alexander set up monthly payments last year for the more than $30,000 each city owed. Helena-West Helena paid $429,000 in back taxes, and the IRS decided to stop attempting to collect the $300,000 that Gould owed because the Lincoln County town couldn’t afford to make payments.
Blytheville voters also passed a 1 percent sales tax in March 2012 to pay $3.7 million in back taxes.
Craighead County officials recently hired a Jonesboro accounting firm that compiled county payroll records and negotiated with the IRS, Holliday said.
“We couldn’t have done this without their help,” he said. “It was a collaborative effort.”
He said U.S. Sen. John Boozman, R-Ark., helped appoint a tax advocate who also assisted with IRS negotiations.
The county ended up paying the IRS $113,362.83 after the accounting firm and advocate worked with tax officials.
“It’s humbling to have this behind us,” Holliday said. “I know $113,000 is a lot of money, but it’s a lot better than $333,000. They did a lot to alleviate the sting.”
Craighead County Judge Ed Hill credited Holliday and the accounting firm for conducting positive negotiations with the IRS.
“He’s young and ambitious,” Hill said of Holliday, 24. “That helps.”
He said IRS officials had told him that Nelms wasn’t “too forward” with giving information to the IRS.
“The IRS said numerous times that there was a ‘blatant disregard’ to the IRS in the past,” Hill said. “We’ve been trying to repair that since.
“With our new people, I was hoping the IRS would see we were willing to come to the table and not be so standoffish.”
Holliday said he installed new computer software to ensure payroll taxes would be met on time in the future.
“I was elected to try to take care of the county’s business,” he said. “Anytime I get something from the IRS, it becomes the No. 1 priority. I am glad this is all behind us.”
Arkansas, Pages 9 on 04/19/2013