OKTIBBEHA COUNTY – Oktibbeha County is on the hook to pay OCH Regional Medical Center’s tax penalty bill issued by the Internal Revenue Service in 2022.
The county received notice of the bill June 22, and the board of supervisors learned about it during executive session at Monday’s meeting. The board resolved to pay the bill regardless of the amount, though it is still trying to determine what that is.
“If you read this letter trying to figure out how much they’re asking for, me and a lawyer couldn’t read it and figure it out,” County Administrator Wayne Carpenter told The Dispatch on Monday. “… I don’t know how much we owe, I’m going to be honest, but my estimation is in the range of $250,000.”
Board Attorney Rob Roberson told The Dispatch on Tuesday he estimates the bill could be anywhere from $219,000 to more than $400,000.
The IRS bill is an example of the “unforeseen liabilities” the county is responsible for following the sale of the hospital and will be paid out of the remaining profits set aside to cover these liabilities, Carpenter said.
The Dispatch obtained a copy of the June 22 notice letter from the IRS stating it had partially disallowed OCH Regional Medical Center’s “request for penalty abatement.” The IRS has forgiven $248,130 in penalty but the letter does not state what the remaining penalty balance is.
The Dispatch also received a copy of the request for abatement letter sent to the IRS by OCH Regional Medical Center on May 23, 2024, which stated the civil penalty fines originally totaled $434,970.
The IRS issued two penalties, one for a failure to file forms containing health insurance information with the IRS as required by the Affordable Care Act and the other for failing to provide employees with a form containing health insurance information.
In the hospital’s response to the IRS, it claims it provided employees with the form but recognized it failed to file with the IRS due to a glitch in its payroll software and an inability to get in contact with the IRS during the COVID-19 pandemic. The hospital argued that this failure was not a result of negligence and therefore should be forgiven.
The failure to file penalty was $217,620 and the failure to furnish penalty was $217,350.
The IRS issued the penalty on Feb. 7, 2022, and the hospital communicated with IRS agents prior to filing the request for abatement, according to the abatement letter.
The IRS collects interest on unpaid penalties, but the penalty letter shown to The Dispatch did not list the current total owed after interest.
Roberson said he is working with the law firm Butler Snow to get clarity on the bill.
“We are having a hard time working out how much we’re supposed to pay back,” Roberson said. “… So we’re just sitting here scratching our heads.”
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