A Small Town’s IRS Woes

Even small American towns need tax lawyers sometimes. While the town’s people may be “hardworking and pay their taxes,” this small town is not. The town of Pratt, West Virginia is facing some serious tax issues that could lead to the dissolution of the town itself, says an official from Kanawha County. Last week, county officials learned that both the town and its water plant owe about $140,000 to the IRS. The reason for this is a back tax issue, stemming from the failure to hold federal tax from employees in the years 2008 to 2010.

This isn’t the first time that the town has needed assistance from the county. Earlier this very month, Kanawha County paid $5,000 to stop legislative action from being taken against the town, as the state of West Virginia was making firm threats to sue the town of Pratt if it did not pay a sum of more than $30,000 in retirement contributions owed by the Pratt’s water plant. While money withheld from the employee’s paychecks, the money was never turned over to the West Virginia Public Retirement Board. After the receiving the amount paid by the county, the retirement board has promised to delay a filing a suit, and will not do so if the amount is paid in full by their September 7 deadline.

In light of these dire financial troubles, the future of the town is unclear. According to local media sources, the future of Pratt will be discussed at the next meeting of Kanawha’s City Commission by request of Commissioner Dave Hardy.

Hardy is quoted as saying, “It’s either receivership of dissolution.” His faith, he says, has been lost in the town’s ability to govern its own financial affairs with insight and discretion.

Other county officials are not so hasty in their declarations that dissolution was a definite option. Kanawha County President Kent Carper said that while he and other county officials were not willing to bail the town out completely using county funds, they are willing to take measures to prevent dissolution, which is a last resort.

One way in which to ease the back taxes burden on the town would be to hand over the operation of the town’s water plant to West Virginia American Water. Not only have unreported withholdings been an issue with the town-run water plant, but residents of the town have also been informed that the water they have been drinking for over a year has been contaminated.

Carper said that the people of the town deserve better than this, as the county officials pledge to keep the best interests of the townspeople in mind when resolving the tax issue.

Unfortunately, even small towns can have back tax issues. If you or even your business is facing back tax or other tax withholding issue, contact your competent tax official to assist you in resolving your issues. The IRS is no discriminator of persons or entities—it will come after you.


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