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October 13, 2011


IRS now involved in Fort Stockton money mess

IRS agents are visiting Fort Stockton, Texas, and not to take in the scenery. Caught in the crosshairs are city officials, who argue they were left hung out to dry by former officials. It was recently reported that $1 million in city money had been misappropriated. The discovery was made only a few weeks ago, but the IRS is already getting involved.

At issue is money that city auditors found to be misused by a former city manager and former interim finance director. The mayor issued a statement that said that some $1.4 million dollars had been moved from Fort Stockton certificate of deposit accounts into the city’s general fund account, taking place in 2008. The money was then used to pay city bills instead of being used for infrastructure purposes, as had been intended.

The mayor said that the money transfer could have resulted in the bank canceling the loan completely and could have caused the IRS to shut Fort Stockton down. As it is, the IRS is now investigating the facts and circumstances surrounding the transactions.

The mayor also claimed that he believes the two former city employers knew what they were doing was illegal. The city has since hired a tax lawyer, and the city attorney is also looking into possible criminal charges.

When the IRS gets involves it is time for legal advice, whether it is a city, corporation or individual. In a case such as this, not only could the mayor and other officials who did nothing pay the price, but taxpayers could be on the hook for any damages that the IRS decides to levy against the town. Taxpayers put their trust in their government to provide services and not misspend their money, they do not need to be subjected to financial mismanagement.

Source: NewsWest 9, “Fort Stockton City Auditors Find $1.4 Million in Misappropriated Funds,” Geena Martinez, Sept. 27, 2011