IRS moves to intercept Walkerton library taxes

Book lending has come to a halt at the Walkerton Public Library—apparently due to book keeping problems.

The library suddenly and mysteriously shut its doors last month.

A sign on the front door today offered apologies for the inconvenience and stated that the closing will be temporary.

Today, News Center 16 found evidence that the library is in serious financial trouble for its failure to pay federal withholding taxes.

“We’ve been notified by the I.R.S., the Internal Revenue Service about ten days ago that there’s a lien against their distributions of any monies they’re to receive,” said St. Joseph County Auditor Pete Mullen. “We’re holding that right now until we get further clarification from the Internal Revenue Service.”

On Monday, Mullen will send checks to most local units of government as he divvies up the proceeds of property tax payments made in May. No such check will go to the Walkerton Public Library.

“It’s not a hard decision at all that we have a lien and we will not distribute it,” said Mullen.

The library was in line to receive $44,633.50. That’s less than the $47,920.67 it allegedly owes the IRS.
“We’re asking for a little bit of clarification from the Internal Revenue Service, there are some questions that have been asked by the library itself and we’re hoping we can get an answer for them sometime next week,” said Mullen. “I don’t know if the library is open or not but this will be, if there’s a partial distribution, that will help them certainly.”

The library’s last state audit covered the years 2007, 2008 and 2009. It was completed in early 2010. Auditors from the Indiana State Board of Accounts were so critical of the library’s book keeping practices, that the library director resigned and the library treasurer was terminated.

Paperwork indicates that the problem actually became worse after the shake-up. The I.R.S. Notice of Levy shows that the library fell $20,000 behind in withholding in 2010—more than twice any of the amounts associated with previous years.

Some of the federal withholding payments that were missed by the library and are still unresolved, date back to 2001.

“This is the first time I can remember in five and a half, six years, that we’ve had an I.R.S. lien against a unit of government,” said Mullen.

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