ADAMS -- The Retirement Board is working with outside counsel to resolve a decade-long payroll tax filing error that has resulted in fines from the Internal Revenue Service (IRS).
Officials say the Office of the Treasurer was responsible for the filing errors. While fines originally amounted to $80,000, roughly $4,000 of this sum was forgiven this week, the board said at a meeting Tuesday.
The balance remains in flux.
"We're hoping that a lot of this will be abated ... [that] it's just an issue where [taxes were] filed either under the wrong number or the wrong form and it's just a matter of getting it to the right bucket, if you will," Bernard A. Pinsonnault, Chair of the board, said at Tuesday's meeting.
Pinsonnault described the $76,000 figure as a "moving target" -- one they'd like to "totally alleviate or minimize" -- as negotiations continue between the IRS, the board and attorneys.
"We're fairly certain all the taxes have been paid," Pinsonnault said in an interview Thursday. "Our belief is that they just weren't allocated properly."
However, that the Retirement Board will incur costs is certain.
The board is asking the town bear these costs, in accordance with the recommendation of the state Public Employee Retirement Administration Commission (PERAC), because the treasurer originated the error.
It resulted in the effective, but unintentional, withholding of town retirees payroll taxes.
The nominal penalty is the result of both accrued taxes and interest, Town Accountant Mary Beverly, who first noticed the filing issue, said.
Board members said they've engaged the services of a Providence, R.I., attorney specializing in such matters at a cost of roughly $10,000. PERAC provided the referral.
Pinsonnault said Thursday the issue was partly due to lack of IRS ground support.
"Everything is done online now," Pinsonnault said. "Meanwhile, there's a lot of changes taking place [to IRS forms and filing protocol] ... I think it's just a situation where there's nobody to talk to."
The error has recurred since 2001, Retirement Board members said at Tuesday's meeting. If so, it spans the tenure of town Treasurer Holly Denault, elected in 2004. Alan Jozefiak preceded Denault in the role.
According to the board, Selectmen have been notified with a "full explanation," said board members, but have yet to responded. Nothing has been paid at this point and the penalties are "not accruing," they added.
IRS spokeswoman Peggy E. Riley said Thursday the penalties were probably discovered in an audit. Riley couldn't provide specifics due to privacy and disclosure laws.
In other business from Tuesday's meeting, the board accepted Police Chief Donald Poirot's retirement, coming on April 26.
An annual statement was also given, which reported the retirement system in "excellent shape" and Board Administrator Cheryl Lillie performing well.
To reach Phil Demers, email