I'm Darrin Mish. For 32 years I've practiced federal tax litigation \u2014 routine audits, Tax Court cases, and everything in between. If you're facing an IRS issue, here's what you need to know first.<\/p>\n
New Brockton town owes the IRS more than $44,000 in unpaid taxes in 2010. \u00a0As a result, the IRS recently placed a levy on New Brockton town accounts for failing to remit taxes. \u00a0But town Mayor Lenwood Herron said the levy has since been released. \u00a0IRS records reveal that the levy was lifted July 14 for \u201call property, rights to property, money, credits and bank deposits greater than $5,131.11.\u201d \u00a0Mayor Herron also disclosed bank statements showing five of the town\u2019s 14 accounts at Troy Bank and Trust released from the levy by July 18. According to Mayor Herron, $5,000 has been paid towards the first and second quarters of this year. \u00a0The amount due for both quarters came up to more than $20,600.<\/p>\n Following the levy release, the town was able to pay salaries to its employees. \u00a0A unanimous town council vote in July paved the way for a separate account to be set up to deposit employee tax withholdings. \u00a0Mayor Herron also disclosed that he was in contact with the IRS over the outstanding taxes and will set up a meeting with the agency to discuss an offer in compromise.<\/a><\/p>\n Regardless of the outcome of whatever meeting that may be held, the IRS insists that the town stay current in this year\u2019s tax liabilities. \u00a0In order to comply with this, Mayor Herron has instructed Police Chief Dale Grimes to reduce his employees\u2019 working hours by 25%.<\/p>\n In a letter to Police Chief Grimes, Mayor Herron wrote, \u201cFor instance, if an employee works 40 hours per week, his\/her schedule would be reduced to 32 hours per week. \u00a0This reduction in force is mandatory and will enable the town to meet its IRS and Alabama Department of Revenue payroll liabilities.\u201d<\/p>\n Councilwoman Kathy Holley has expressed her concern that the town\u2019s failure to pay its taxes would adversely impact the town employees\u2019 social security accounts. \u00a0However, an IRS official said that an employer\u2019s failure to submit tax withholdings will have no effect on the employees.<\/p>\n In addition to its tax woes, the town also owes more than $125,000 to several other businesses and agencies.<\/p>\n
\nLast<\/a> July, the IRS issued a levy notice to the town stating that it did not pay its taxes for 3 out of 4 quarters in 2010, including taxes of almost $40,000 (with penalties) for the second and third quarters of last year. \u00a0Then on July 12, New Brockton submitted their quarterly employer tax return filings for the fourth quarter of 2010 and the first two quarters of this year to the IRS.<\/p>\n