Court learns of IRS issue on employee ID numbers

Members of the St. Francis County Quorum Court Budget Committee heard from SFC Clerk Brandi McCoy last week about a letter sent to the county from the Internal Revenue Service stating that problems had been discovered on tax returns from 2022. According to McCoy, the county received the letter in June showing that the county owed over $20,000 in penalties regarding employee ID numbers. “The IRS said we were late in submitting our taxes," said McCoy. "I proved that to be incorrect so I sent that to them and they said they would let us know if there was anything else. Then, we got a letter saying we still owe $20,000 something. I got with Craig and we were going to get with Fletcher (Long, St. Francis County Attorney), to see if we could get a ledger so I could find out what was wrong, because I called them and they said there were some incorrect employee ID numbers. "Craig said that he would like to go ahead and make that payment," continued McCoy. "He said we could be reimbursed after we dispute it and everything has checked out. We just want to get with Fletcher and see what we need to do to get it corrected." McCoy said the IRS representative she spoke with would not tell her what employee ID numbers were allegedly incorrect and that she would need to submit a letter to receive that information. "We got the first letter in October 2025 telling us there were issues, " said McCoy. "I sent back information proving that some of what they said was incorrect. They just sent a letter in June and said that we still owe them $20,000 something. I called them again and asked them what this was about and they said it was incorrect employee ID numbers. I asked them which numbers were incorrect and they wouldn't tell me over the phone. They said we had to submit a letter requesting that information. They won't tell me anything on the phone." Justice Kevin Vandiver share that an issue which arose with his business from 2017 was brought up in 2021 and just finalized in the spring of this year. "I have had something similar with the IRS dealing with my business and a tax return," said Vandiver. "They said I put something wrong on it and I received it in 2021. They had assessed a penalty and all of that. I had an accountant I contracted with and we just resolved it this spring. Come to find out, we were right and they were mistaken. It was a bunch of letters back and forth and it went on for years. Who actually pays our taxes and balances the books? Is that done in house or do we have an accountant?" "We have an accountant," said McCoy. "Years '24 and '25 were done by Miller and Associates out of Wynne." "But until then, we were doing it in house, so your office would have filed those forms and if they made a mistake, it would have been at your office,” said Vandiver. “But we don't know if we made a mistake." "Right," said McCoy. "I got a letter previously, but it was nothing like this." "We don't know if we made a mistake though, right?” asked Vandiver. "We very well could have made a mistake." "I don't know what mistake they are saying we made," said McCoy. "Are you going to turn this over to an accountant and let them communicate with them?” asked Vandiver. "I was going to do it because I am the one who did it," said McCoy. "I was going to get with Fletcher and let him read it and correspond with him and keep him in the loop." Justice Regan Hill shared that he felt like the best thing to do at this point is to table the discussion and get an accountant working on it immediately. "The only problem I have with it is the fact that we are going back to 2022," said Hill. "Every time I have had to deal with them, every time I went to the Post Office they had a letter for me. It wasn't three or two years later. We didn't even know about this until June?" "We got the original letter in October 2025, but I proved them wrong in that one," said McCoy. "It was about multiple infractions and totaled over $40,000. I sent in what documentation I had at the time and proved that they were wrong on some of it. We just got the new letter in June saying we still owe over $20,000." "If we are not wrong, then we are not going to have to pay anything," said Hill. "I think right now we table it until we know more. We need somebody working on it now. Tomorrow morning, somebody needs to be working on it." According to Vandiver, the best thing to do is hire an accountant and he feels that if a mistake was made in a particular department, then the penalty should come out of that department’s budget. "I would like to see us hire or contract with a professional service, i.e. an accountant," said Vandiver. "I think we need to give them the directive to get this done. They may charge us $1,500 or more to do this, but it would be better than fighting for the next five years and getting penalties and interest built up. If it turns out that there was a certain department responsible, I'll be honest with you, I think the penalty should come out of that department’s budget. I don't think the taxpayers should have to pick up penalties if we made a mistake. I would rather the county pay an accountant $2,000 or $2,500 than pay the IRS $25,000 and hope for a refund." Vandiver said the quicker the county begins communicating with the IRS the sooner the issue can be resolved. "If it turns out that we did everything right, we did what we were supposed to do, then yes, we need to pay that accountant to basically fight on our behalf and represent us," said Vandiver. "The quicker we start communication with the IRS the better off we are. That is how I feel about it. I don't know how anybody else wants to handle this, but I just don't feel the taxpayers need to be picking up the tab for a penalty." "I agree with you, Kevin," said Hill. During the full Quorum Court meeting, SFC Judge Craig Jones told the Court that he is working continuously to figure out financial issues within the county’s solid waste department. "On commercial, we raised rates on the cities," said Jones. "We are at least $58,000 in the hole in revenue. Revenue is up from what it was, but we are $58,000 in the hole in the bank. I don't think we need to cut this either. We are renting out 30 yard dumpsters every day. We have also renegotiated our contract with Boar's Head and it is under review right now. We are doing all we can." According to Hill, at some point, the Court has to do something to "stop the red ink" in their yearly budget. "We gave a percentage of the sales tax that was passed to solid waste to try to get it in line," said Hill. "And thank goodness for that, because if you double this deficit, it would be a tremendous amount. At some point, you have to give two people relief. One, you have to give the judge some relief because I know he can't sleep at night over the solid waste. And, second of all, we have got to come up with a solution at some point to stop the red ink. At some point, there has to be something that we do that is going to stop the red ink."

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