Douglas County’s treasurer accused of misconduct over late deposits of public payroll tax

3257

WATERVILLE — Douglas County commissioners are accusing the county’s elected treasurer of misconduct, saying her late payment of public payroll taxes has led to more than $100,000 in fines from the IRS.

Douglas County filed a lawsuit Tuesday in Superior Court against Treasurer Natalie Marx, saying she failed to deposit payroll taxes in a timely manner for both the county and for some local school districts. The claim alleges Marx failed 13 times in the last year and a half to make timely deposits of federally required payroll tax, instead depositing them anywhere from one to four days after their due date.

Each time, the IRS imposed automatic penalties for late payment, and the county now says those penalties have totaled more than $119,000.

Marx, 41, worked in the Douglas County treasurer’s office for 13 years before being elected to the top position in 2018. She did not return a phone call from NCWLIFE seeking comment today.

Douglas County administrator Jim Barker also did not return a call for comment. But in a court affidavit, Barker says the alleged late payments didn’t just affect county tax dollars. The treasurer also deposits payroll tax for smaller taxing districts within Douglas County, like schools and parks.

The court filings claim Marx’s office was late to deposit payroll tax four times for the Eastmont School District, leading to almost $63,000 in IRS penalties. Late payments on behalf of Bridgeport Schools created almost $4,900 in penalties.

The IRS notified Marx’s office of penalties four times between September 2020 and May 2021. Court filings show the IRS has forgiven more than $26,000 of the penalties after Marx’s office appealed them, leaving the Treasurer with an estimated $93,000 in liability to the federal government.

The County commissioners’ lawsuit accuses Marx of official misconduct, and neglect of her duties as a public official. It says commissioners first became aware of the payroll tax issues in late July, and questioned Marx about six missed payments in a meeting August 3rd. She allegedly told them the matter had been taken care of.

But Barker said after that meeting, he became aware of ten more late payroll tax payments

The county’s lawsuit seeks repayment of the $93,000 in tax penalties from the insurance bond Marx was required to secure when she took office. State law also allows the county commissioners to suspend Marx from office and appoint an interim treasurer while the legal complaint is pending.