Augusta Commissioners were stunned to learn that the IRS had levied a $2 million fine/tax over the failure to properly file documents related to the Affordable Care Act in 2017, and now, evidence shows the problem goes all the way back to 2016.
Additionally, a claim has surfaced that, in 2018, the IRS fined city $5 million for failure to file the same ACA documents, meaning that department heads for Finance, Human Resources and the Information Technology knew about the issue five years ago.
The $5 million bill was never disclosed to the commission, according to a careful review of commission meeting minutes as well as testimony from two commissioners.
According to District 10 Commissioner Wayne Guilfoyle, who was on the commission in 2018 and District 8 Commissioner Brandon Garrett, who came on the commission in 2019, they were never made aware of that first bill from the IRS.
There is no evidence the bill was ever paid, which means that if it remains outstanding, it is still accruing interest.
Since the improper filings may have occurred for up to six years, the final bill to taxpayers may be as much as $15 million plus interest and attorney fees.
Derek Brooks, former benefits manager for the Human Resources Department who resigned in October 2022, wrote an email to Anita Rookard, the department director, on March 13, making the claim of the original fine, and he outlined the process for filing the ACA documents which involves three city departments.
According to Brooks, he was tasked with compiling the ACA compliance packets and mailing them to employees. Once the employee filled out the paperwork, the packet went to the Information Technology Department, which was to file the paperwork with the IRS under the oversight of the Finance Department.
Brooks states that if any discrepancies or problems with the filings occurred, the IRS would notify Finance since that office is the official liaison with the agency.
“Donna (Williams) and Tim (Schroer) were the only account admins. They were the only individuals that could reply to the IRS and inform them that the city was appealing the fine,” Brooks wrote in his email to Rookard.
District 3 Commissioner Catherine McKnight says it appears the departments are now engaged in a circular firing squad with both finger pointing and ducking to avoid responsibility.
“Why do we have three departments in charge of sending out one document?” McKnight asked.
According to McKnight, the situation reminds her of why the grass on city owned property seemingly can’t be properly cut. Multiple departments are charged with cutting grass, but no one seems to know what areas of grass their department is responsible for mowing.
“It’s like ‘Who’s On First,’ only it’s not funny. It’s serious when the taxpayers get hit with such a bill,” McKnight said, referring to the legendary Abbott and Costello comedy clip.
McKnight says that she is going to renew her call for a city wide forensic audit and says that if the commission had listened to her and former commissioner John Clarke years ago, the improper IRS filings would likely have been discovered and the city might have averted what is becoming a financial disaster.
“We have got to hold people accountable; when they get away with it, they will keep doing it and others then think they can get away with stuff too,” McKnight said.
