Missed Forms Could Cost City $1.1 million
City officials are trying to work something out with the Internal Revenue Service to reduce a $1.1 million penalty assessed because the Cincinnati Retirement System failed to send in 1099 forms between 2001 and 2005.
Retirees got their forms, but the federal government didn't. The system paid the correct taxes.
This was discovered during an IRS audit that started in March 2006, according to a memo Tuesday from City Manager Milton Dohoney's office.
The memo attributes the mistake to a new pension operating system installed in late 2000.
"Upon the data transfer and conversion," it says, "the function of filing 1099 forms was not accounted for. Additionally, administrative personnel changes during this period also resulted in miscommunication regarding CRS responsibilities related to IRS filings."
The city's finance director and CRS pension fund manager say procedures have been changed so "this non-filing error does not occur again."
City lawyers and an outside tax attorney are trying to work something out with the IRS.
34 Comments:
at 3:34 PM, April 17, 2008 
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Post a Comment*Man, we could have pissed this million away on the freedom Center.
I am very familiar with this form and how to fill it out. It isn't hard to do, and it is a commonly known fact that if you issue 1099's, you also have to complete this form. It is just mind-boggling that any software could be designed and implemented without this feature, and then handed over to the city without any consideration to making sure this task was done. No excuse, other than sheer ignorance and stupidity, can explain how this happened.
The City of Cincinnati; stupid is as stupid does.
Just waiting for the Democrats' apologists to come over from the Marc Dann threads and somehow tie this to the Republicans.
What a bunch of idiots! No surprise though.
But hey, they wont pay for it, all you Hamilton County residents will. HeHe :) (I'm in Butler)
Any tax accountant with a Mark I brain knows you send a cover form with the 1099s to the IRS at the same time you send the 1009-Rs to the retirees, often before. The same thing happens with W-2s.
My guess is that the whiz kids and political hacks who designed the system "forgot" to include the "mere bean counters" in the design and implementation. After all, we "bean counters" just get in the way with our practicality and our observation of IRS' rules.
Good observation. The dims should be along any minute. I think thier blame-storming session just ended.
wouldn't it be nice if chabot did something to earn his money and used his powers of congressional persuasion for good instead of evil.
software has never been the same since the neocon corporate suits outsourced it to india.
Not to defend the fine folks in charge of crafting this disaster, but any tax accountant worth his salt knows that if you file 250 or more 1099s/W-2s, etc. per year, you must submit them to the IRS electronically - while still providing paper copies to your employees or retirement plan participants.
If you'd never programmed a system like this, you likely wouldn't know these little details - but the folks who do pension work for a living should have known, and it should have been obvious that the required electronic submission wasn't taking place.
Somehow, George Bush will get the blame.
LMAO! I would expect nothing less from this city. Hilarious.
Someone should be fired: let's start with the city's finance director and CRS pension fund manager if they were on the job at the time of this fiasco.
maybe the person(s) responsible for this ERROR should pony up...or lose their positions...but that won't happen with our kinder, gentler City.
The tax division at the City of Cincinnati is filled with power hungry idiots. Most business folks in this town claim that the city's tax collection department is far worse than the IRS. They are cruel, and abusive and will file criminal prosecution charges against taxpayers, in a heartbeat. No wonder the city is fast losing businesses to neighboring counties. This town is a joke.
The City Retirement Board Members are a real bunch of idiots.
I retired after thirty years and last year, the City talked about restricting pension benefits. Now, they pay 1 million plus to the IRS.
I've already paid the IRS and I'm afraid this major lapse will cost me again.
We keep giving to those that won't work and take from those that are and/or did work.
More GOP Hijinks. They just can't help themselves.
Meet the GOP front-runner in the race to replace retiring Rep. John Peterson (R-PA):
Fifth Congressional District front-runner Derek Walker was charged Thursday with two felonies and four misdemeanors in connection with an incident last August at his former girl friend's house in Clearfield.
Walker said this morning before the charges were filed that Clearfield County District Attorney William Shaw Jr. had been pressured to file the charges less than a week before the primary election by Walker's chief rival for the Republcan nomination, State College businessman Matt Shaner.
Asked why the charges against Walker were filed today, Shaw said: "We finished our investigation yesterday -- we got the last two statements yesterday."
The criminal complaint, filed in District Judge Richard Ireland's Clearfield office, charges Walker with burglary and criminal trespass, both felonies, and the misdemeanors criminal attempt, invasion of privacy, disorderly conduct and stalking.
The complaint, filed by Clearfield police Chief Jeffrey Rhone and signed by Shaw, accuses Walker of using his cell phone to videotape a former girlfriend in an intimate moment with another man on Aug. 25, 2007. The complaint also alleges that he had contact with her on two other occasions, despite being told by a police officer on Aug. 25 that he should avoid further contact and that charges were pending.
http://talkingpointsmemo.com/archives/189703.php
My experience with the City of Cincinnati tax department:
2001- paid taxes b/c my employer failed to withhold, they decided I made 3 times as much as I actually made, demanded payment of over $4,000. I never heard from them after sending in another copy of my W-2 with a letter from my employer.
2002- same as above, though I moved (in 2001) and received a threatening letter because the first one they sent (at old address) was returned to sender. Once again, I never heard from them after sending in another copy of my W-2 with a letter from my employer. This time, they wanted an additional 5 grand.
2003- it took them four months to cash my final quarterly check, but they had enough time on their hands to send threating letters. I had sent it certified mail, which meant nothing to them even though they had signed for it.
2004- having sent them quarterly checks for the first two quarters, I informed them that I was no longer working for an employer in Cincinnati, nor was I living there, so that would be the last payment. They still demanded thousands of dollars in "unpaid taxes" despite much documentation from my former employer and I. I sent them evidence of my new residence, evidence of my decidedly non-Cincinnati-based employment, etc. Eventually, they just stopped harassing me. At no point did they ever apologize or admit they shouldn't have pursued me for this.
2005- mercifully went all year without hearing from them.
2006- same
2007- received letters demanding unpaid taxes from 2004, 2005, 2006. I sent them copies of that which I had sent them in 2004 detailing my lack of residence in, or employment within, the City of Cincinnati.
2008- received letter recently demanding 2004, 2005, 2006, 2007, unpaid taxes.
In case you are wondering, I do not have a common name. I am the only person with my name listed in the phone book in Cincinnati, and in the three other metro areas in which I have lived in my adult life. Born in a western state, my SSN is far different from most people's around here.
They are inept, they refuse to admit they are inept, and they are rude about it. Employees and even supervisors swear at me on the phone.
Looks like that $800,000 the City "found" for the trolly study is going to Uncle Sam instead.
I love how a government bureaucracy quantifies five years of late paperwork - paper work that, in the end, we find was actually unnecessary.
Now the taxpayers have to pay the bill.
Although the Federal government is unreasonable when it comes to paperwork and fines, rules are rules.
The City should probably start paying attention to things like services, infrastructure and filling out forms instead of wasting time on pie-in-the-sky dreams that cost us millions in studies. The City should get out of the real estate business because they are awful at it as well.
In fact, is there anything in which the City is not inept?
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" Anonymous said...Just waiting for the Democrats' apologists to come over from the Marc Dann threads and somehow tie this to the Republicans. 4:49 PM, April 17, 2008"
This system was designed by a wRong wingnut whacko, purchased by a wRong wingnut whacko, maintained by a wRong wingnut whacko, and discovered as corrupt by a Democrat !
And you, sweetie, are a wRong wingnut whacko spewing the elephant dung propaganda, PERIOD !
Nuff said !
PATHETIC 'HypocRites' !
HAD ENOUGH, VOTE DEMOCRAT 2008 !
If the city has to pay the entire $1.1 million, it will likely borrow the money, using a "judgment bond" to do so, Dohoney wrote. Those are used to pay large legal settlements when the city doesn't have enough cash on hand, Olberding said.
That's outrageous. The taxpayers should not have to go into debt because the city can't handle it's finances properly.
A better solution would be to rescind the $800,000 that they "found" for the streetcar study and the $400,000 approved to the Slave Center. That would pay for the $1.1 million and leave the rest available to make sure the pools stay open.
Does anon 11:03 have any proof that "This system was designed by a wRong wingnut whacko, purchased by a wRong wingnut whacko, maintained by a wRong wingnut whacko, and discovered as corrupt by a Democrat !"
You looked up the party affiliations of the software designers, city purchasing agents and city tax department workers, and the person who discovered the error? Wow, I had no idea someone could get so much done foot-tapping from the men's room in City Hall. Bold Endeavors indeed!
Ah, how I yearn for the halycon days of The Failed Lemmie Administration.
is that $1.1 million or 1.1 million yen? Stevecia Reece and Skirtchasing Boozehound Charlie Luken would like to know.
A friend of mine worked for a company that didn't withhold Cincinnati Earnings Tax, so every 3 months he sent in his estimated payment.
They began writing him that he hadn't been paying. After 2 or 3 quarter of this he went to the Tax Department and upon retrieving his file the Tax Department Employee found, paperclipped inside this manila folder, his last 2-3 checks, undeposited.
Yes, more government is better government my liberal friends.
How soon before Council calls a hearing on this?
Another reason to embrace HR25!!!!!
Floating a judgment bond my foot! Dohoney has been looking for creative ways to stick a fork in the retirees of the City since the first day he sat his plushbottom in the City Manager's chair.
It's time to clean house. Those to receive pink slips from the citizenry/taxpayers are: the City Finance Director, Dohoney & Mayor Zero. And that's just the starters.
I believed this larceny by trick of the taxpayers' money was over with when Lemmie & her lemmings left the building. Cridy! This Dohoney is costing us more money than Julia LaRita McNeil ever did with her hush money deals with criminals!
It's time to railroad the bunch of them out of here!!
FIRE 'EM ALL
PUT THESE INCOMPETENT BUREAUCRATS ON THE BREAD LINE
Any one can point fingers anonymously in here, and it still solves nothing. Let's point and blame, call them names, and at the end of the day, you will all pay. If you post here anonymously without a solution, then you are as pathetic as I am. I mean they are. Thank you,
Alfred Nonymous, Milford.
We should demand politicians and bureaucrats be personally responsible for their own negligence. Once again, we taxpayers are paying the price for their stupidity. Make Milton and Bill Moller cough up the mil themselves. Oh, that'll bankrupt them? Too bad. Welcome to the real world. If my stupidity or laziness cost my employer a million dollars, I'd be paying for it.
Anonymous 6:58, Luken is Drunk came up with the perfect solution: rescind the money that was "found" for the streetcar study and Slave Center. That gives $1.2 million, which is just more than needed to pay this judgement. Problem solved.
One more reason the city should not be in the pension business. Name one other city in Ohio with its own pension system. Name one other city in America with a population of 300,000 with its own pension system. Wake up taxpayers, your taxes are high because city council gave away the farm with the most generous retirement benefit ever seen. Of course, city council is not all to blame becuase they were duped by the smooth talking city officials saying it would be all fine. Now $200 million in the hole and the IRS is poking around. Public severants rise not their incompetence, but to serve themselves.
Is the money spent for Mayor Urkel's bodyguards tax deductable?
ST CSA
Amzed, but not surprised. Public servants are low paid for a reason, and these are the results. Job shifts are not an excuse, as management should always be reviewing current state of affairs and performing a gap analysis. Hasn't anyone in this department heard of an internal compliance review? All fines should come from everyone who worked in the department, eveyone in the software selection process who did not have this little item as a requirement, and everyone who audited the software after installation.
To 3:55 pm...what software? Believe me when I tell you that many departments within City Hall are still using typewriters!
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