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Vidalia mayor: No law was broken in unpaid tax issue

Mayor Hyram Copeland said Tuesday nothing illegal occurred within City Hall regarding $635,412 in unpaid federal taxes the city owed, but it’s still something he’s looking into.

The city’s tax troubles were something Copeland said he was not aware of until a representative with the Internal Revenue Service arrived at Vidalia City Hall Thursday to collect the unpaid balances.

“I didn’t receive any notices,” Copeland said. “There’s nothing illegal that’s been done or anything like that, it’s just that some people didn’t do their jobs.”

The entire unpaid balance, Copeland said, was paid Friday to the IRS representative — contradicting City Attorney Jack McLemore’s statement Monday night that a check was sent after a notice was filed on Sept. 18.

“We paid the total amount immediately as soon as we found out about it,” Copeland said. “But I’m sitting down with my staff and even the IRS this week to go over everything more in-depth.”

Former City Manager Ken Walker, whose last day was Sept. 18, said he was unaware of any situation involving the city and the IRS.

“If that’s what they’ve uncovered, I’m not aware of that at all, and that’s totally new to me,” Walker said. “There may have been errors, but no city employees have ever done anything with malice.

“It had nothing to do with my decision to leave.”

And until he’s had a chance to examine the situation closer, Copeland said he wouldn’t comment on how the notices might have gone unnoticed or how the city paid the $635,412 last week.

“I don’t want to make any statements until I have all my facts,” Copeland said. “I just don’t have all the answers right now, but I will soon.”

Dee Stepter, IRS spokeswoman for Mississippi and Louisiana, said the IRS is prohibited by federal privacy and disclosure laws from discussing the tax situation of any taxpayer or group of taxpayers. Stepter would also not answer general questions about the Vidalia situation.

The situation is something Copeland said he’s never dealt with in his time in office.

“I’ve been around a long time, but we’ve never gone through anything like this before,” Copeland said. “We’re taking appropriate measures to get everything in line with the city.”

The unpaid payroll taxes included amounts withheld from employee paychecks beginning in 2006 and continuing sporadically until 2012 for income taxes, Social Security and Medicare.

Those unpaid balances resulted in the Internal Revenue Service filing federal tax liens at the Concordia Parish Clerk of Court’s office Sept. 18 against the City of Vidalia.

Just under $200,000 of the assessed taxes were for tax periods ending in late 2011 and 2012, but approximately $450,000 were for periods between 2006 and 2010.

A federal tax lien is the government’s legal claim against an individual, business or government entity’s property when a tax debt isn’t paid.

The lien arises automatically when unpaid balances aren’t paid within 10 days after an initial notice is sent, according to the IRS website.

After the 10 days, a notice of federal tax lien is filed, which publicly notifies creditors that the IRS has a claim.

Once a lien arises, the IRS generally cannot release the lien until the taxes, penalties, interest and recording fees are paid in full or until the IRS may no longer legally collect the tax, the site stated.

The notice filed against the City of Vidalia lists nine unpaid balances, and two penalties for failure to file information returns or wage and tax statements.

• The two penalties filed are listed for tax periods ending in 2007 and 2009 but assessed in 2010 and 2012, which total $12,866.86.

• Three unpaid amounts were listed for the tax period ending on Dec. 31, 2006, and assessed in 2008 and 2009, which total $64,544.22

• Two amounts are listed for tax periods ending in 2010, and assessed this year, which total $371,209.28.

• Three amounts are listed for tax periods ending in 2011 and assessed this year, which total $178,439.51.

• The most recent unpaid balance listed on the notice is for the tax period ending on March 31, 2012, for $8,352.89.

The total for all unpaid balance of assessments does not reflect accrued interest, penalties or payments made after the notice was filed.

The IRS places a 10-year statue of limitations on lien collection. After that term expires, the notice can be refilled or released.