Bull Shoals council disputes anonymous $4,323.78 IRS payment, demand clearer financial reporting

All right, I would like to circle back to our IRS penalties," Councilman Howell said as he opened a prolonged exchange about the city's payroll tax payments and an anonymous payment that covered $4,323.78 in IRS penalties.

Howell read dates and delays from documents he said he obtained through public records requests, saying the city missed multiple quarterly withholding-payment deadlines in 2025 and that some returns were paid months late. "For instance, on our first quarter, we were five and a half months late," he said, and added that the second and third quarters were not paid until late December.

Howell pressed council leadership on how an unnamed private citizen learned of the penalties before the full council did. "I kind of have a few questions about the citizen that paid this because it appears to me they had knowledge of the discrepancies of our financial situation before the council did," he said, calling the sequence a "cover-up" if council members were not informed promptly.

Mayor Bill Stahlman responded that the IRS notice arrived in the city mail and that penalties were paid after the city received the correspondence. "Tuesday afternoon is when the city got in the mail from the IRS the penalties," he said, while Howell countered that he had received an email at 8:08 a.m. advising him of the penalties.

Recorder Paula Reynolds was recorded as the city official who had been contacted by Howell; Reynolds and other officials were asked to provide supporting documents for the council. Residents in the audience and Councilman Meinking asked for clarity on whether state withholding or other payments were late; Reynolds said state payments had not incurred penalties.

The exchange included a claim that a citizen who sought records via FOIA had obtained the returns. "The citizen, doing their due diligence, FOIAed it, got the information, brought it to a councilman," Howell said. Gary Heinbach of The Bugle, who was named earlier in the meeting in a separate apology on a business-license reimbursement, defended his reporting during public comment.

The council did not take a formal vote or motion addressing internal review or audit during the meeting. Several council members said they wanted clearer documentation and faster internal communication about the city's tax and withholding obligations; the issue remained unresolved at adjournment and council members indicated they would pursue the records Howell referenced.

Next steps: Council members asked the treasurer and city staff to provide the requested payment records and correspondence so the council can establish how the anonymous donor learned of the penalties and whether internal controls or contractor performance warrant further action.