SC county hopes to avoid paying full $1M penalty in years of missed tax payments
Fairfield County has made three-quarters of the payments required for years of missed tax payments, members of county council were told this week.
The county has paid the IRS $768,000 out of more than $1 million the county owes in penalties for tax filings it failed to make for years and that staff only discovered at the end of last year, Interim Administrator Clay Killian told council members on Monday.
County staff discovered in December that Fairfield had missed several tax filings going back six years. Staff found errors on employee health care 1094 and 1095 forms submitted for 2017. In 2019, the county was late filing a quarterly report for the end of the year, and was late with another report in 2020.
The year-end report for 2021, in contrast, was found to have been submitted twice. Also, county staffers discovered the quarterly report due October 2022 was not submitted until June 2023, while the health forms for 2021 were never submitted.
In total, the county owed at least $1,184,417.11 for the late filings, officials said at the end of 2023. At the time, the failure to make the submissions was blamed on the county’s human resources staff not being able to connect with the IRS, since only the finance department had access to the agency.
“We had to get that corrected, and we brought a temporary (staffer) in to get all that filed,” the interim administrator said. “With HR filing those forms, we won’t have problem in future.”
Fairfield County officials are hopeful that county taxpayers will still be able to avoid paying the full amount of the tax penalties.
“We have finally finalized the 2021 forms and they have been submitted and accepted by the IRS,” Killian said. “The penalties for 2021 have not been assessed yet, and we hope the auditing firm we’re working with will be able to submit the appeals process and not get it assessed at all.” The county will have a hearing with the tax agents within 60 days, he said.
Staff is still working on the other missed years. The missed 2020 report has been partially repaid, and the 2019 report has been fully assessed and paid, Killian said, “but I think we’ll get a good bit of that back.”
The county will continue appeals on removing other penalties as well, Killian said. One challenge is that the county lacks evidence that health forms were actually sent to county employees.
“We sometimes mailed those and they were not given electronically, so we don’t have a record of that,” Killian said. “But we’re working with the IRS to show how that can be proved.”
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