IRS and Tuskegee Agree on Plan


After much discussion, the IRS has accepted a plan from the city of Tuskegee to repay its tax arrears. The city had hired 2 tax attorneys to submit its proposal to the IRS. They submitted an initial proposal on April 16 but the IRS asked for more information. Then a second proposal was submitted, which was fnally accepted by the IRS. But the city made a payment of $17,160 as a gesture of good faith before the second proposal was accepted.

As at November 9, 2010, the city had accumulated $3,448,229 in unpaid taxes including penalties and interests after deducting those taxes from employees for payments to the IRS. About $2 million of this amount comprises of interests and penalties. The city had frst paid employee salaries and benefts such as health insurance and contributions into retirement funds. Due to lack of fnances, the city had insuffcient cash to pay the IRS.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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