Waynesville, school district work to resolve schools’ overdue tax payments

Village may waive some penalties, but says this is not first time; former treasurer left district in fall

Waynesville Village Council is expected to decide next week what to do about Wayne Local Schools’ chronic issue of being late in submitting the income taxes that have been withheld from its employees.

Village Council will determine if a one-time partial abatement of income tax penalties for the Wayne school district should be granted. According to council documents, the school district owes about $27,075 to Waynesville, Xenia and Fairborn, for late payments of income tax that were withheld for employees.

Interim School Treasurer Al Porter said 93% of that total is owed to the village of Waynesville. He said the penalty fees totaled $24,621.

Amy Arrighi, executive director of the Regional Income Tax Agency, declined to comment on the matter citing taxpayer confidentiality, as the school district is a member of the organization. The Brecksville-based Regional Income Tax Agency administers the income tax code for Waynesville and nearly 400 other Ohio municipalities.

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Last month, former Wayne Local Schools Treasurer Ron James wrote a letter to the RITA that was copied to village officials seeking forgiveness on the penalties and interest. In the letter, James said he was “shocked” that the school district had any liability due. He also said he never received any notices of any issue from RITA concerning local income taxes and that his payroll person did not forward any notices to him.

James also made a similar request for forgiveness to village officials for the outstanding penalties and interest, as this happened on his watch as treasurer. Porter said the district has not made a formal request seeking any abatements of penalties or interest due to the municipalities.

James left the district in late fall via a separation agreement with the district.

Waynesville’s income tax code is based off the Ohio Revised Code and levies a penalty of 50% of the amount of unpaid income tax withholding for businesses, and 15% for individuals, according to village Finance Director Kitty Crockett.

In her recommendation to council’s finance committee and to council, Crockett said she would reduce the penalty to 15%, which would total $3,693. However, the school district would be liable for the interest owed to the village.

Crockett said the village has the right to reduce or abate income tax penalties and interest, and there is one-time occurrence permitted to lower or abate for any non-payments for payroll withholdings. She said each occurrence has to be done individually and then approved by council along with a resolution.

She told the Dayton Daily News that had this been a first-time late payment to RITA, “I would have understood and waived the penalty.”

Crockett said this was a continuing problem. However, she did not believe the error was made with any malicious intent and that James was not aware of the late payments. She is not sure that the school payroll employee had followed through on her duties or was unaware of those duties. Crockett believes the error was due to a lack of internal controls.

In addition to the late income tax withholding payments, the district is also trying to resolve four tax liens that the state has placed, according to Porter. The Auditor of State’s Office is also conducting a special audit of the district.

Council is scheduled to meet at 7 p.m. Feb. 21 at the Waynesville Municipal Building, 1400 Lytle Road.

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