Skip to content

IRS penalizes county in excess of $60,000

Grady County taxpayers could be on the hook for more than $60,000 in penalties payable to the Internal Revenue Service unless the Grady County Commission is successful in convincing the federal government to waive the charges.
The penalties stem from the Grady County Board of Commissioners’ office failure to timely and accurately file 1099’s for 2014 and 2015. The county has sought professional help for issues regarding the 2016 filings, as well.
The Messenger learned of the county’s IRS woes through an open records request in accordance with Georgia law. Public records of correspondence from and to the IRS related to Grady County were produced and delivered to the newspaper Monday.
Two different accountants have been hired by the county to seek an abatement of the penalties, according to public documents.
Based on comments from Grady County commissioners, the board was unaware of the issue until approximately three weeks ago, but public records indicate that the county’s Accounting Manager Donna Johnson and County Clerk Carrie Croy have known about the problems a year, if not longer.
Grady County Commission Chairman Ray Prince could not be reached for comment Tuesday and did not return two voice mails. Vice Chairman T.D. David told The Messenger, “I just learned of this about three weeks ago. You know you think everything is just hunky dory and then all of sudden bam. We are working through it and we feel pretty good about getting the penalties waived, based on what I’ve been told.”
Commissioners LaFaye Copeland and Keith Moye also say that they have only recently learned of the issue and Commissioner June Knight only joined the board in December.
Public records indicate that former Grady County Administrator Carlos Tobar was also aware of the situation. In October, Tobar engaged Bainbridge accountant Perry Henry, who has since been contracted by the county as its auditor, to attempt to resolve the issue with the IRS. Henry was hired as the county auditor in December and is already in the process of preparing to audit the county’s financial records for fiscal year 2017.
Henry told The Messenger this week that when he was contacted last October he was presented multiple IRS notices. The accountant also said that the county likely had received notices prior to 2017 for the tax year 2014 errors.
“When you are dealing with the IRS it moves slow, but yes I suspect they have known about this for quite awhile, but they were trying to respond and get it straightened out,” Henry said.
“They needed help. They kept getting notices and were not having any luck getting it resolved. Getting someone to help them was the responsible thing to do,” Henry said.
The Bainbridge accountant would not speculate why county officials waited so long to seek professional help. Henry said Tobar likely called him because the two had met briefly when Henry was serving as the interim Decatur County administrator.
Henry issued a letter on Nov. 3, 2017 seeking to have $10,860 in penalties assessed by the IRS related to tax year 2014 abated. According to a reply received from the IRS, a determination on Henry’s request for abatement could be issued in March.
The county clerk reported this week that Henry was paid $357.60 for his services.
On Feb. 17, Accounting Manager Johnson executed a power of attorney to H. Harrison Tillman Jr., a Valdosta accountant, to represent the county in seeking a waiver of a $53,820 penalty assessment related to improper filing of 2015 1099’s. Tillman is also representing the county in regards to the filing of 2016 1099’s, based on public records. According to Vice Chairman David and Henry, Tillman was recommended to the county by new county attorney Jennifer Dorminey Herzog.
Tillman issued a letter to the IRS last Friday, Feb. 23, and the IRS has not had time to respond.
Henry said Tuesday he was not made aware of the $53,820 penalty assessment when he was engaged last November.
Public records released this week also show the county has been penalized for late payment and nonpayment of payroll taxes. The Messenger requested the county’s IRS correspondence for 2017 and 2018, but did not seek any correspondence prior to 2017. What can be determined is that there has been previous correspondence and the county staff has responded.
A cumulative total of all penalties assessed or paid by the county over the course of the last four years was not available at presstime.
In both Henry’s letter and Tillman’s letter, the two accountants cite turnover in the county commission office as a reason for the county’s improper filing of 1099’s.
“The county had a significant change in staffing following the passing of the long standing county administrator in 2012 and submitting these forms were likely overlooked,” Henry wrote to the IRS regarding the 2014 filing of 1099’s. How the death of the late administrator Rusty Moye on Sept. 27, 2012 impacted the filing of 2014 1099’s is unclear.
Henry went on to write, “The current administration actually thought the previous administration had resolved this issue and only discovered it wasn’t as the result of a call for another unrelated issue.”
Tillman’s letter to the IRS states, “Grady County had a long time employee in the finance department leave in 2014 and more turn over in key positions including County Manager over the 2014 to 2016 years. With this turnover, employees were put in charge of performing tasks that they had never performed and were not provided any training to properly perform the task.”
For the record, former County Administrator Carlos Tobar was hired in June 2013 and remained employed by Grady County through December 2017; Accounting Manager Donna Johnson was hired as an accounts payable clerk on May 1, 2014 and then was promoted to accounting manager in April 2015; former accounting manager Connie Blackman Elkins was hired in February 2014 and resigned Jan. 12, 2015; and former finance director Mary Mayer was hired in August 2006 and was terminated in December 2013.
Compounding the issue prior to the county seeking professional help was the fact the county staff was confusing payroll tax notices with 1099 notices, according to both accountants. Tillman wrote in his Feb. 23 letter, “There was no willful neglect on the part of the Grady County Board of Commissioners. They had completed the filing of 1099’s properly for years but due to rapid employee change over, the new employees lacked the knowledge and ability to properly file.”
Henry, in a telephone interview Tuesday, described the county’s chances of the IRS abating the penalty as “decent.” He said, “I think we’ve got a pretty good shot, but there’s no way to really know. I’ve had pretty good luck in the past.”
“(Accounting manager) Donna (Johnson) said she never got the training she needed. I’m not aware of the circumstances of how she landed in that position, but she needed training from the beginning from someone with more experience,” Henry said.
The county’s new auditor said he has told commissioners that he would be “brutally honest” in performing the county’s audit. “I don’t see myself working for the county commission. I’m working for the taxpayers, that’s who I’m trying to protect.”
Commenting on the IRS related issues, Vice Chairman David said that all filing and remittance of payroll taxes is being done electronically now. David also said that Thomas County Commission finance department official Laura Nichols, who has been providing additional accounting assistance for Johnson, is “doing her some good.”
David said Nichols is continuing to work with Johnson and County Clerk Croy reported to-date Nichols has been paid $1,390 for her accounting work.
During this interim period when Grady County is without a county administrator, the board of commissioners had authorized paying both Johnson and Croy an additional $500 per week for splitting the administrative duties in addition to their regular job responsibilities.

Leave a Comment