Iowa City school district fined by IRS

IOWA CITY – The Iowa City school district has been fined more than $25,000 by the Internal Revenue Service for a late payment on payroll taxes last spring.

Superintendent Stephen Murley said Thursday the payment was one day late. The district has appealed the $25,539 fine.

Murley said the IRS tries to determine if the mistake was part of a pattern, and he said federal officials have indicated the district has a good chance of being refunded the full amount. A decision is expected within three weeks, he said.

While every dollar is important to the district, Murley said more concerning was that this was another accounting error for the district, following on the announcement earlier this month that $2 million in bookkeeping errors had been discovered.

An outside audit will be performed of the district's operational processes, and Murley said the tax issue will be part of that review.