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Lamar council votes to pursue IRS abatement after late/missing reporting; payment deferred pending outcome
Summary
City finance staff said quarterly/annual IRS reporting for 2020–2025 had missing filings that generated a proposed fine (~$120,000 plus interest); council voted to pursue an abatement request and to withhold payment until the abatement decision is resolved.
Lamar’s finance director informed council on June 22 that the IRS had issued a proposed assessment tied to missing or late reporting for fiscal years 2020 through 2025. Worth Ferguson told council staff have submitted the missing forms and recommended pursuing a first‑time abatement request with the IRS rather than immediately paying the fine, which he estimated at roughly $120,000 plus accruing interest.
During the meeting Ferguson described outreach to IRS staff (summary of visit Form 9297) and explained that an abatement request requires a narrative and supporting information; he and city legal/finance staff said they believed the city had a strong case for abatement but could not guarantee the outcome. Council discussed the tradeoff of paying and seeking refund versus pursuing abatement and risking interest accrual; several members cautioned against paying and then attempting to reclaim the money.
Council voted to authorize staff to file an abatement request and directed that the city not pay the assessed fine while the abatement process is pending. Staff said interest accrues daily and that the abatement review timeline is controlled by the IRS, though they expected action within weeks rather than months.
The item prompted questions about internal controls and steps taken to prevent future reporting lapses; staff said they were implementing a reporting tracker in the finance department, migrating systems and had already filed the outstanding forms. The council action was recorded as a motion to enter the abatement process and defer payment pending outcome and passed by voice vote.
