In a letter to Blytheville Mayor James Sanders, City Attorney Mike Bearden recommended that, as soon as possible, the city reimburse former Mayor Barrett Harrison $8,381.30 -- tax refund money that the Internal Revenue Service apparently applied to the city's IRS debt.
At the city attorney's suggestion, Sanders has submitted Bearden's letter to members of the Blytheville City Council, which would have to approve the reimbursement.
"I am sending you a copy of a Notice and Account Transcript Barry Harrison received from the Internal Revenue Service," Bearden wrote on Oct. 24. "The Notice reflects that the refund which Barry and wife would have received for 2011 in the amount of $8,381.30, was applied to the 2007 and 2008 taxes which were owed."
The letter says the accounts transcript shows three credits transferred out to civil penalties totaling $8,381.30.
"Page 3 of the Transcript has a statement signed by (IRS officer) Eugene Chism stating that the money was transferred as a credit against civil penalties owed for the third quarter of 2009 and the second quarter of 2008," Bearden wrote. "This notice does not state who owed the taxes, but based on the information I have, I am assuming this was applied to the City's IRS debt. If the City's debt was reduced by $8,381.30, the City should reimburse Barry and his wife for that amount as soon as possible. I believe this will have to be paid out of the general fund since the excess sales tax revenue is required to be used for future payroll taxes, and I doubt this would qualify. It is my understanding that Mr. Chism will confirm all of this."
"Regardless of where the funds come from, it is my opinion that Barry should be reimbursed for any amount the City received credit for, and I think it needs to be done as soon as possible," Bearden wrote.
In May, Harrison met with Bearden and Finance and Purchasing Committee Chairman Tommy Abbott, asking the city of Blytheville to reimburse him $30,905.79 for "unnecessary legal fees" and tax refund money applied to the city's Internal Revenue Service debt.
A May 14-dated letter from Harrison to Councilman Abbott solicits reimbursement of $22,524.49 in legal fees and his $8,381.30 tax refund.
On Thursday, Harrison said the reimbursement in Bearden's letter is for "my money that they used to pay the actual city's debt."
The former mayor provided the city with the transcript that he says shows how the IRS applied his refund money to the city's bill.
"While there does seem to be some controversy over what all reimbursement myself and Doug Bush or anyone else may be entitled to, the city attorney and ... several others have already agreed that I am in fact due a bare minimum of that money," Harrison said Thursday. "We've asked for that and then we'll just have to see how things turn out."
Former Blytheville City Treasurer Doug Bush has also asked the city to reimburse him $21,034.01 for legal expenses and mileage after he says the Internal Revenue Service concluded he bore no responsibility for the delinquent payroll taxes.
mbrasfield@blythevillecourier.com