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City of Corvallis faces IRS fines

The city didn’t become aware of the penalties until early August.

Posted: Aug 21, 2020 8:05 AM

CORVALLIS, Ore. -- The city of Corvallis faces a penalty of $243,000 for late payroll tax payments to the IRS.

For more than three years, some payroll tax payments were transmitted late to the IRS – a few days late, in most cases, but long enough to warrant penalties.

The city didn’t become aware of the penalties until early August.

An initial internal review suggests that an employee did not notify a supervisor of repeated warnings from the IRS about the compounding penalties and did not respond to those warnings. This employee left the city in January, months before the error was uncovered.

“This singular incident, while serious and disappointing, does not reflect on the good work performed by the city of Corvallis each day in our community,” said City Manager Mark Shepard. “We will move forward and find an acceptable outcome for this issue, and we will redouble our efforts to improve transparency and accountability in all aspects of city services.”

Officials say all taxes have been paid, and the penalty doesn’t represent criminal activity.

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