NAVASSA, NC (WWAY) -- The IRS has issued a nearly $35,000 fine to the Town of Navassa. When reached by phone this morning, Mayor Eulis Willis said the council has not yet talked about the penalty, but it does have the town's lawyer working on it.
In a letter dated January 2, the IRS says the $34,964.62 penalty is for "Failure to File Forms W-2." The W-2 is the form employers give workers as a record of their wages and withholdings.
Town Administrator Claudia Bray says the mistake was discovered early last year when an employee showed her their Social Security statement, which showed no contribution in 2008. Bray says she notified the council about it and started investigating. Bray said while checking with the IRS she found out then-Town Clerk Charlena Alston never sent the W-2s to the IRS and Social Security Administration.
Bray says in November she fired Alston because of issues with her job performance. Bray says Alston did not work under her supervision when the error was made in 2008. The town council, though, recently decided to rehire Alston and give her back pay. She returns to work next week, Bray said.
A phone number for Alston could not immediately be found to reach her for comment.
"A penalty has been charged for each Form W-2 that was not filed as required by section 6051 of the Internal Revenue Code," the letter says. "Our records indicate that both the Social Security Administration and the Internal Revenue Service have been in contact with you to attempt to secure these Forms W-2.
"The penalty for intentional disregard of the filing requirements is the greater of $100 per required return or 10 percent of the aggregate amount of the items required to be reported."
Bray says she filed the 2008 W-2s by a statutory deadline last month. She says that's when the IRS issued the penalty. Now, she says, the town has to figure out how to pay it.
The IRS letter says the town has until January 23 to explain to the IRS what happened and ask for the penalty to be removed or reduced.
Mayor Willis said because the council has not yet had the chance to discuss it, he did not feel comfortable speaking publicly about the IRS fine. He did say that in addition to its lawyer, the town's financial team would be looking at the problem.