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City official seeks authority to settle IRS audit up to $130,000
Summary
City staff told the council the city is closing a year-long IRS audit covering 2021–2022, and requested authority to settle or extend the matter with a payment not to exceed $130,000; officials warned penalties and interest could raise the total and said new software and outside counsel are assisting.
A city official told the Edwardsville City Council that a year-long Internal Revenue Service audit covering 2021 and 2022 is in its closing stages and asked the council to authorize settlement or payment of assessed liabilities not to exceed $130,000.
The official said the city has worked with its certified public accountant and municipal tax counsel at Kutak Rock, and is scheduled to meet with IRS representatives to finish the review. "That's to not to exceed $130,000," the speaker said when describing the amount the city may be asked to pay. The official added that penalties and interest could increase the total, estimating "another $50,000 or more" as a possibility and noting the IRS could seek information for 2023.
The speaker described operational changes taken to reduce future risk, including new accounting software that the city plans to put into full use in November. They said the software and the CPA's work have tightened vendor documentation practices, such as ensuring W-9 forms before payment.
Councilmembers did not record a formal vote during the discussion. The official framed the request as authority to continue negotiations, seek extensions, or pay assessed amounts as necessary to conclude the audit. No formal ordinance or motion to appropriate funds was presented on the record during the meeting.
Next steps: the speaker said staff will meet with the IRS and return to the council once the meeting produces a definitive figure or settlement terms, possibly by mid-November; if an extension is granted staff will report back with the final numbers.
