Elmer R. Littlefield Jr.
ELMER R. LITTLEFIELD, JR. CANDIDATE FOR LEWISTOWN, IL. MAYOR

ELMER R. LITTLEFIELD, JR.

CANDIDATE FOR

LEWISTOWN MAYOR


Please Read My Take on the City’s IRS Problem! Thank You

TO THE RESIDENTS AND TAXPAYERS OF LEWISTOWN, ILLINOIS:

At the Lewistown City Council meeting on February 28, 2017, Mayor John King disclosed that the City has a huge tax liability to the Internal Revenue Service in excess of $200,000 for unpaid taxes, interest, and penalties. This liability resulted from the City’s failure to timely pay employer and employee withholding taxes, Social Security taxes, Medicare taxes, and federal unemployment taxes to the IRS. Instead, the City wrongly paid both state and federal employer and employee taxes to the IllinoisDepartment of Revenue from 2014 for a period (according to the Mayor) of seven calendar quarters. 

This mistake caused a massive overpayment to the State of Illinois and a massive underpayment to the IRS. This mismanagement of City funds continued for almost two years until the new City Administrator advised the Mayor in late 2016 of the IRS problem. I am shocked that such a financial disaster could be hidden for an extended period and not discovered by any responsible City official for over two years. According to the Mayor, the former City Administrator failed to make the required IRS deposits. 

This raises the following questions:

  • Did the City have no oversight or checks and balances in place that would have resulted in Discovery early on?
  • Who reviews and signs tax returns?
  • Does anybody review the City’s bank accounts?
  • Are the City’s financial books and records regularly reviewed by an accountant or auditor?

Why did this costly mistake occur and continue for almost two years without the knowledge or discovery of any person who holds public office in Lewistown? How many people dropped the ball? As a result of this incompetence, Lewistown taxpayers are likely on the hook for a large amount of IRS interest and penalties. These issues should be fully investigated, now that the Mayor has brought this disastrous matter to the public’s attention. I have regularly attended City Council meetings for the last three years (twice each month), and the failure to make the required IRS deposits was not disclosed to the community until February 28, 2017. 

Since this fiasco is now public knowledge, more details should be fully explained:

  • What is the exact dollar amount of all required tax deposits not paid when due?
  • What is the exact dollar amount of all required tax deposits that still remain unpaid?
  • What is the additional liability imposed on the City for interest for failure to pay the taxes on time?
  • What rate of interest is being charged to the City?
  • What is the additional liability imposed on the City for penalties for failure to pay the taxes ontime?

We are told the City hopes to convince the IRS to cancel all or a portion of the reported $75,000 in penalties. Has the City filed a formal request to cancel the penalties? If yes, what is the status? If no, why not? What steps has the City taken to apply for a refund of the massive overpayment of taxes to the Illinois Department of Revenue? 

One reason I’m running for Mayor is that I believe the City should have strict rules and procedures in place for effective oversight of all City expenses. My bachelor’s degree (with emphasis in finance, accounting, and economics) and many years of management experience have prepared me for such a challenge.

The Mayor and City Council should act as custodians and guardians of all public funds. And this is certainly feasible in a community the size of Lewistown. If elected, I will call for the immediate review of current practices, if any, to prevent another major financial loss caused by oversight, mistake, or negligence of any City official or employee. If there are no strong checks and balances, I will adopt them.

And just as important as preventing future mistakes, I ask the Mayor to explain why he was not aware of the problem before the new City Administrator disclosed it. Is it customary and proper for a mayor of a small community to lack knowledge of whether the city is properly and timely paying its bills, especially the payment of large liabilities such as taxes over a two-year period?

We constantly hear that a small community cannot afford expensive checks and balances suggested by accountants and auditors. But, there are economical steps that the City can internally adopt, without the necessity of hiring expensive consultants, to prevent a future financial mess. 

These two easy steps can be accomplished without any extra cost to the City:

  • On a monthly basis the Mayor, the treasurer, and the financial chairperson must review all City bank statements to confirm that required tax payments have been made to the IRS and the Illinois Department of Revenue.
  • On a quarterly basis the Mayor, the treasurer, and the financial chairperson must review the quarterly payroll tax returns to make sure that the tax deposits match and agree with the taxes owed.

A complete, impartial investigation is needed to uncover who is responsible for this financial disaster. If I am elected, I will undertake such an investigation.


Thanks for your support.

Elmer R. Littlefield, Jr.