Danielsville owes nearly $80,000 to IRS

Now, they are dealing with a hefty bill owed to the Federal Internal Revenue Service. The city of Danielsville owes roughly $78,000 in payroll taxes to the IRS for 2007 and 2008.

“She (Dills) just kept putting it off and didn’t notify anyone,” said Mayor Glenn Cross Tuesday. “She didn’t pay the payroll taxes for those two years. The IRS sent us several letters, but she hid those letters and didn’t tell anybody.”

The city’s 2006 audit revealed that Dills had written herself 70 checks and allegedly stolen $56,000 in city funds. But city officials and investigators believe there will be more missing money. Still, no hard figures are available yet on how much money is really gone.
“We won’t know until the audit firm is through with it,” said Cross.

Danielsville officials are now waiting for the auditing firm of Vance and Associates to complete a review of financial figures for 2007 and the first nine months of 2008, when Dills was still employed. Auditor Ben Vance told the council Monday that the firm’s review could be completed next month. Meanwhile, the city is also reviewing financial records from as far back as 2003.

The Danielsville City Council discussed the ongoing investigation, along with the IRS payroll tax headaches during its Monday night meeting. They agreed to pay payroll taxes for the third quarter of 2008, an estimated $10,000, using money from the city’s general funds.
Cross said the city is not going to run out of money but added that the missing funds have caused problems.

“It’s not that we’re running out of money,” he said. “We’ve stayed pretty well in the black, but her taking this money has caused us to stretch everything out right now.”

The council agreed Monday to seek a line of credit from one of the three local banks to take care of the delinquent payroll taxes. The group agreed that the tax matter needs to be handled immediately. And they preferred borrowing money to cashing in city CDs to cover the cost.

Dills was a bonded city employee, meaning that the losses the city incurred due to her alleged theft can be covered for up to $500,000 through the city’s bonding agency.

However, the investigation into how much money is actually missing must be completed before the city can file an insurance claim. The Georgia Bureau of Investigation continues to look into the matter.

City attorney Victor Johnson was asked Monday if the city will be able to recoup all of the costs associated with the theft. He noted that the city will be able to recover missing money if it meets the conditions of its insurance policy, while also adding that insurance companies don’t always cover claims. However, he said he hasn’t heard anything to suggest the city won’t be able to be reimbursed for missing funds.

City council member Junne Temple said that the city will work diligently to make sure that proper safeguards are put in place to avoid any future incidents.