Leader Blues

Tuesday, August 05, 2008

TOP STORY > >IRS owed $97,350 by Cabot

By JOAN McCOY
Leader staff writer

The Cabot Parks Department owes the Internal Revenue Service $97,350.54 in federal taxes that were withheld from employees’ paychecks but not paid during the last quarter of 2006 and all of 2007.

That amount does not include the $45,000 in penalties the IRS could charge the department for not paying employees’ federal taxes, or the $13,000 that parks has paid the state in recent months for taxes held out of employees’ paychecks but not remitted on time.

Sarah Michelle Rye, a bookkeeper for parks fired in mid-2007, who was arrested this year after she admitted to embezzling $8,063.44, was in charge of the books until she was dismissed, but not for the last two quarters of 2007.

Larry Tarrant, who was hired as parks director in April, said this week during a phone interview about the missing money that he doesn’t know how it happened, but he assumes the State Police investigation that started about the same time he became director will provide the answers.

“When I took over, I started getting letters from the IRS,” Tarrant said. “I can’t explain it because I wasn’t in charge.”

Lonoke County Prosecutor Lona McCastlain called for the State Police investigation in January after Rye admitted to embezzling money from parks by writing herself duplicate paychecks over a two-year period.

Rye was sentenced in circuit court April 9 to five year’s probation, three of which are supervised.

At the end of the five years, she may petition the court to have her criminal record sealed.

Carroll Astin, director of the parks department for 10 years, resigned in April, saying he had been a public servant most of his adult life and it was time to move on to the private sector.

If the State Police investigation shows that Rye is connected to the failure to remit the taxes and she is found guilty of other felony charges, she would lose her ability to petition the court to have her record sealed.

Presumably the investigation will also show who didn’t remit the tax after Rye left parks.

Questioned by Lt. Scott Steely on Jan. 17, Rye said she wrote herself 19 duplicate paychecks in 2005 totaling $3,987.22 and 12 duplicate paychecks in 2006 totaling $4,076.22.

Those figures indicate that Rye’s take-home pay increased $120 a paycheck from 2005 to 2006. Sources say police began their investigation after an audit of the park books for 2006 showed the discrepancy in the payroll.

Parks was over budget $100,000 in 2007, and the city council voted in January to pay that amount to help parks start the year.

Now Tarrant says he will have to find the money to pay the IRS almost $100,000 in back taxes, but he hopes the $45,000 in penalties will be waived.

As for the possibility of getting behind again, Tarrant says, “I guarantee you it’s getting paid now.”