The waiting game continues.
Blytheville officials are still waiting on the IRS to accept the 1-cent tax as the payment method for the multimillion dollar payroll tax debt.
The IRS may be waiting to see how much the 1-cent tax generates.
And Blytheville taxpayers are waiting to learn exactly what happened to the unpaid payroll taxes as the State Police and FBI continue their joint investigation into the matter.
"It's still ongoing," Second Judicial District prosecuting attorney Scott Ellington said Tuesday afternoon of the probe into the circumstances surrounding the payroll withholding tax debacle.
The investigation has been ongoing since at least April.
"It's still active," said Lt. Brant Tosh, who heading up the investigation for the Arkansas State Police. Tosh added there is no timetable for its conclusion.
Meanwhile, Tuesday afternoon, Blytheville Mayor James Sanders speculated that the IRS is delaying accepting the temporary 1-cent tax until finding out how much it produces. The tax passed in March, but didn't kick in until July 1.
City collector Janie Battles said the city won't know what was collected in July until September. Since last October, the city has been paying $10,000 a month to the IRS for the delinquent payroll taxes.
"It's my own belief -- and I state my own -- that the IRS is possibly just waiting to see what the tax will bring in," Sanders said. "They are aware that it's already started and it's just my own belief that they are just waiting to see what the tax will generate to make the monthly payments and how we can actually for once have funding directly in our hands, per se, and say it's going to go directly to you. It's not going to go to any funds belonging to the city."
The mayor said the Department of Finance and Administration has agreed to send the tax money directly to the IRS, and the city will receive notification of what was collected.
Sanders noted the city's tax attorney, Memphis-based Baker Donelson, has filed all the proper abatement of penalties forms, and the taxpayer advocate "is still engaged in it."
He added the IRS is still researching whether or not it has rights to the $1,134,033.64 in excess parks and recreation funds from the Series 2007 bonds that showed up a week after the 1-cent tax special election.
Sanders has maintained the money is dedicated, by ordinance, specifically for parks and recreation, and it can only be used for that purpose.
"We have been using our own funds and we are showing them (the IRS) that we also need these funds because the parks and parks and recreation have been neglected," Sanders said. "Anything that we're fixing we are keeping itemized statements on those."
The city is submitting those receipts to the IRS.
"We have already shown due diligence in what we have said that we would do," Sanders said. "It has been a year and eight months. Since that time, we have kept up-to-date our payroll taxes so we've shown due diligence in that. We've also shown that, by the citizens' vote, that we are looking to take care of these issues. We just continue to do the things that we said we're going to do and now it's just up to them to move forward with that."
At last report, the city owed the IRS $3.2 million for unremitted 2009 and 2010 payroll taxes and penalties and interest, though Blytheville officials are working with the taxpayer advocate to abate some of that debt. The largest chunk of the debt is $2.4 million in unpaid payroll taxes.
mbrasfield@blythevillecourier.com