04 May 2006

ANC-5A Seeks Compromise with IRS To Resolve Tax Mistakes

First publically reported in the March/April 2006 issue of the Brookland Heartbeat (you may need to join the Brookland listserv to view the PDF, but if you send an e-mail to the editor, Abigail Padou, she will send you an electronic copy), ANC-5A is seeking a compromise with the IRS to lift a $21,632 IRS lien imposed on its bank account Dec. 5, 2005. The total tax liability stands at approximately $26,000. Today WaPo reports on 5A's payment of more than $9,900 Dec. 14, 2005 to lift the lien and it's proposed payment of $10,000 to clear the record. According to today's article:

ANC 5A's [annual] allocation is $34,889.40, based on its population of 24,348, which makes it the city's second-largest commission, after ANC 5C.

ANC 5A covers the Brookland, Fort Lincoln, Michigan Park, North Michigan Park, University Heights and Woodridge neighborhoods.

As a result of the commission's tax problem -- first reported by the community newspaper Brookland Heartbeat -- officials have imposed austerity measures on its operations.

In her letter, [5A's Treasurer Sandi Washington] informed the IRS that ANC 5A has decided to seek a volunteer replacement for its paid staff, asked commissioners to take on some duties of the paid staff, and intends to relocate the ANC's office into donated space. The ANC offices are in a rented trailer at 1322 Irving St. NE.

[. . . .]

The District's Office of the Auditor has asked ANC 5A officials to explain how it got into problems with the IRS. Some ANC and city officials said that when the commission corrected its initial mistake of failing to pay payroll taxes, it made a second mistake: It began paying those taxes with the wrong IRS form and sent them to the wrong address.

"It seems to be more a matter of lack of familiarity with procedures than anything else," said [Gottlieb C. Simon, executive director of the District's Office of the Advisory Neighborhood Commissions]. "I believe they paid something to the IRS . . . but not with the right form . . . so penalties started to accumulate with interest payments on it."

Commissioner Timothy Thomas, who was ANC 5A treasurer in 2003 and 2004, said: "It's not a tax problem. . . . It's a penalty problem. . . . It's not like we owe Uncle Sam. They were paying taxes, but come to find out [they were] paying them to the wrong place."

Thomas added that all the commissioners "decided not to talk about" the problem until it was fixed.

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