Newburgh paying interest to IRS for past mistake

By Alex Barber, BDN Staff
Posted Dec. 26, 2012, at 4:59 p.m.

NEWBURGH, Maine — A mistake made in 2010 is costing the town of Newburgh now.

An IRS W2 form was filed past the deadline in 2010 at a time when an embezzlement scandal was rocking the town. Former Newburgh deputy clerk and treasurer Cindy Dunton was sentenced to prison in 2011 for embezzling nearly $200,000 from the town for nearly five years.

During a time of mass resignations and turnover, the W2 form “was one of those things that slipped through the cracks,” said Serena Bemis-Goodall, who was hired Oct. 15 as Newburgh’s administrative assistant and treasurer.

After she came on board, Bemis-Goodall said she found a letter dated Sept. 28 from the Internal Revenue Service in response to a Sept. 24 letter from Selectman Claude Bolduc.

“He did a very good job of putting in the facts and penalties already paid, what the town had been through with Cindy Dunton and all that [in explaining why the W2 form was late],” said Bemis-Goodall.

She said the IRS thanked the town for the letter and included an envelope asking for payment of a $1,950 fine for the late filing.

“Cut and return this voucher immediately with your payment,” Bemis-Goodall said the letter read. She added that the town received a second notice requesting the same payment.

She said she called the IRS when she was informed that it would be best for the town to pay the bill immediately in order to stop the interest from accruing. The town was being charged 4 percent interest per day on the $1,950 bill. The town is appealing the fine for the late filing.

“That’s absolutely crazy,” Bemis-Goodall said of the interest rate.

She brought the information to the Board of Selectmen on Dec. 17, when they signed an emergency warrant to have the $1,950 bill paid the next day.

“To me, isn’t it more logical to make the payment and then, if they decide in our favor, we’ll get it back?” Bemis-Goodall said.

There’s a chance that the town will get the money back, she said. However, the oversight will cost the town dearly if the IRS doesn’t find in Newburgh’s favor.

“One way or the other, you’re still looking at over $5,000 [because of the 4 percent daily interest]. That’s just crazy,” she said, adding that the IRS has not determined whether it will reverse the fine.

She said it was another black mark for a town still trying to recover from the embezzlement scandal.

“It’s sad. It’s another one of those things for this poor town,” Bemis-Goodall said. “I just want everything to get caught up and straightened out.”

http://bangordailynews.com/2012/12/26/news/mid-maine/newburgh-paying-interest-to-irs-for-past-mistake/ printed on July 23, 2014