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City of Marion bank accounts no longer under levy, city works to get finances in order


Marion City Hall (WBMA)
Marion City Hall (WBMA)
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Nearly $700,000 in unpaid federal income taxes from more than more than a decade ago caused a serious headache for the city of Marion this week.

Late Monday – the city was informed their bank accounts were seized by the IRS.

On Tuesday afternoon, the accounts were back in control of the city. That means city workers will be paid this week and moving forward. That is a big relief for Mayor Dexter Hinton. He said Monday's actions by the IRS came as a complete surprise for the city.

“We actually haven’t gotten any notice. We thought we would get a notice, a call, something. Sometimes you get a 90 day, 30 day, 60 day notice. Unfortunately we did not get anything. If we haven’t have known from our direct contact at the bank, we would not have known til this morning," said Hinton.

"I cannot make payroll - cannot pay any bills and cannot do anything with these accounts because they have been seized by the federal government," the city clerk said in Monday night's emergency city council meeting. The meeting came after the city's bank notified them that the IRS seized control of their account.

"We understand this is an issue we have to resolve and we are trying to resolve this the best way we can," said Hinton.

Since it happened Monday around 4 p.m., after business hours, Hinton said he and city leaders had to wait until Tuesday morning to reach out to address the problem. He said they held the emergency meeting on Monday to be transparent and let the public know what was going on.

“Our city attorney, our accountant who has the power of attorney, has been reaching out to the IRS to get this rectified, and we have been looking at institution to make sure this doesn’t happen again," said Hinton.

The reason the account was seized in the first place was due to unpaid taxes. From 2008 to 2011, the city collected more than $640,000 in federal income tax from employee pay checks, but on at least nine occasions, the money was not delivered to the federal government.

“What really threw us off, based on a ten year span, it is supposed to fall off. It is passed over ten years, now it is going back to collectable status," said Hinton.

Prior to Hinton’s term, he explained the city had 50 acres of property seized and auctioned off for $25,000 dollars to pay uncollected taxes.

ABC 33/40's Valerie Bell asked Hinton, “would you say there was financial mismanagement prior to your term?”

Yeah very much so," he responded. "We can see that now. If it wasn’t we wouldn’t be facing these issues. In 2008, I was still in college.

Even though the problem stems from a previous administration, Hinton said it’s something they need to address now. The city is looking at ways to get money transferred and get their finances in order.

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See Also: Water woes continue in Marion as city tries to get finances in order

“The way things are going we might have to step it up a notch to see if we can recover all those lost funds so we can restore the faith back into our city," said Hinton.

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ABC 33/40 did communicate with the IRS to find out more. We were told that any information would come from their criminal investigations division. We reached out to them, but have not yet heard anything back.

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