First on WSFA 12 News: Tuskegee in hot water with IRS - WSFA.com Montgomery Alabama news.

First on WSFA 12 News: Tuskegee in hot water with IRS

The City of Tuskegee is in hot water with the IRS.  The Tuskegee City Council approved measures Tuesday night to help pay back $3.2 million dollars to the federal government and recoup the city's $700,000 deficit for this fiscal year.

Tuskegee native Dothel Edwards wasn't shocked when the IRS froze the city of Tuskegee's accounts on Friday but the city's administration says they never saw coming.  "I don't know why the IRS does what it does when it does," says Tuskegee Mayor Omar Neal. 

Neal calls Friday's incident a miscommunication.  Once he explained the plan to pay the IRS $3.2 million dollars, the agency released the accounts.  "The warning comes in the form of a possibility of a levy, but that mayor may not take place," says Neal.

The frozen accounts and the $3.2 million owed to the federal government weren't mentioned during the city council meeting, but a plan was adopted to recoup losses from slumping sales tax revenues.  First, the city will cut all salaries 15% across the board.  This time the salary cuts will affect public safety.  The city's occupational tax will be increased to 3% with 1% dedicated to repaying the IRS.  Mayor Neal tells WSFA 12 News that is somewhere in the neighborhood $800,000 annually.  Which means it could take four years to make good on the debt.

It wasn't the debt rather a question about the current HR position that struck a cord.  As Edwards asked about the position's salary, the city manager revealed it was a contract position offering $49,000 to work two days a week, sending a council member heading for the door.

The city says at this point, there are no levies or liens on their property or bank accounts.  The citywide salary cut will go into effect September 4th.

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