RAPID CITY, S.D. — The Internal Revenue Service has hit Pennington County with more than $87,000 in penalties for mishandling payroll taxes.
According to Pennington County Auditor Cindy Mohler, the IRS looked through taxes from the last three years and discovered the county wasn’t taxing mid month paychecks at the proper rate.
The county is changing to a bi-weekly pay schedule to make sure this doesn’t happen again.
The IRS imposed the penalties this month after examining the county’s employment tax records from 2016 to 2018. Officials say the penalties are the result of a longstanding payroll-tax practice.
Mohler says county employees have the option of being paid twice a month, instead of monthly. The IRS says the county wrongly did not withhold payroll taxes from the mid-month checks. Instead, the county waited until the end of each month to withhold payroll taxes from employees’ total monthly pay.
Mohler says her attempt to appeal the IRS decision failed, but says she has requested a dismissal of one year a savings of more than 27 thousand dollars.
