Wrangell’s school district officials have set aside $20,000 to resolve federal tax issues they say are a case of crossed wires.
Wrangell Public Schools’ business office manager Tammy Stromberg says that it’s a few different problems, but boils down to the fact that the district was filing paper tax returns and paying by check.
“In times past, that wouldn’t have resulted in any issues at all,” Stromberg says,” But at the moment, the IRS is very short-staffed due to COVID, and possibly, other factors may be having to do with a budget, I’m not sure. But they haven’t processed the paper returns on time.”
Paper documents sent to the district’s business office by the Internal Revenue Service show that the issues with the district’s quarterly tax filings happened throughout 2020 and 2021, and give conflicting messages over whether the school district paid too much or too little in taxes.
“The IRS has been sending notices saying that we owe taxes for some money for some quarters, and then that we have huge credits for other quarters when, in fact, we don’t have credits that we have been filing returns, they just haven’t processed them,” Stromberg says.
Stromberg met with IRS officials on March 23, and has been in communication with the federal tax agency to make sure that payments the district has been making get to the right places. It’s an issue that’s further complicated by the fact that the district was also paying by check, which makes the matching-up process a little more complex.
“A lot of what I’ve been doing is sorting through which payments go where and what the quarterly reports should be, and helping the IRS help us,” Stromberg explained. “So they’re sorting out a problem, we’re helping them sort out our problem.”
The school board committed $20,000 last month to help sort it out. But the full cost of clearing up the interest and resolving other issues isn’t clear yet. Stromberg says the district should have a better idea of what it might actually owe the feds by next month.
And Stromberg says the district hopes to avoid this issue in the future – it’s already started paying taxes online, and has new accounting software to make sure the district is filing its quarterly reports online and on time as well.
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