Petersburg employees receive IRS tax bills for money they don’t owe

Petersburg employees receive IRS tax bills for money they don’t owe

PETERSBURG, VA (WWBT) - The city of Petersburg is owning up to a mistake that finds the IRS seeking thousands of dollars from city employees.

Leaders say a former worker who handled payroll sent the wrong file to the federal government. That file indicated city workers made more money than they actually took home - and now the IRS wants its money.

Leaders say they’re trying to get this resolved as soon as possible but it’s hard to reach the IRS because the federal government is shut down.

"I’m responsible for a large sum of money that I didn’t receive,” said a person whose identity NBC 12 is protecting.

On Thursday, he opened his mailbox and got a big scare.

"I’m actually worried because there are a few people you don’t want to mess with in life and the IRS is one of them,” he said.

He received a nearly $7,000 tax bill, which includes a penalty for more than $1,000. The bill says his 2017 tax return reported he earned $9,000 less than the government has on file.

But that’s not accurate.

"In this case the file was incorrect. It sent the total gross pay and not the adjusted amount, not the W2 amount,” said Michael Rogers, Petersburg’s chief operating officer.

Rogers said all employees will be affected by the incorrect information being sent to the IRS.

More than 600 people work for the city, including police officers and firefighters.

Petersburg sent a letter to city workers Friday explaining that the W2s they received were correct, but the file the city sent to the government was not. Now the city is providing documentation for workers to send back to the government.

"They should say they disagree with the presumption of new taxes … we’ve given them instructions in the letter to fill out the appropriate forms there so they can send back to the IRS and that should be the end of it,” Rogers said.

The city is also trying to reach the federal government to inform them of the mistake, but can’t due to the shutdown.

"A lot of people would say ‘how on Earth could this happen?’ NBC 12 asked.

"I guess easy if the person whose doing it is not focused,” Rogers said.

"I’ve worked many places and this is the first time this has ever happened to me,” the unidentified person said

Leaders say the city employee who made the mistake parted ways before this came to light. Petersburg has made changes in the payroll department to make sure there are more eyes watching.

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