Computer glitch has Chatt. schools in a bind

CHATTANOOGA, Tenn. (AP) -- The Internal Revenue Service insists the Hamilton County School system must pay $650,000 dollars in penalties and interest for under-reporting payroll taxes.

The amount is much more than the 27-thousand dollars the schools failed to pay in the first three quarters of the 2006 calendar year.

School officials say they discovered a computer glitch that caused the under-reporting and they paid the taxes in January.

The IRS came back with a $944,000 bill for interest and penalties.

The school system filed an appeal the waive the bill in May, but found on August 9th the federal government was willing for forgive only part of the penalty.

Chief Financial Officer Tommy Kranz told the school board the error came in January 2006 when the computer payroll accounting system erroneously generated two payroll tax numbers. The district then based its calculations on the wrong number.

(Copyright 2007 by The Associated Press. All Rights Reserved.)

Join the Conversation!

To comment, the following rules must be followed:

  • No Obscenity, Profanity, Vulgarity, Racism or Violent Descriptions
  • No Negative Community Comparisons
  • No Fighting, Name-calling, or Personal Attacks
  • Multiple Accounts are Not Allowed
  • Stay on Story Topic

Comments may be monitored for inappropriate content, but the station is under no legal obligation to do so.
If you believe a comment violates the above rules, please use the Flagging Tool to alert a Moderator.
Flagging does not guarantee removal.

Multiple violations may result in account suspension.
Decisions to suspend or unsuspend accounts are made by Station Moderators.
Links require admin approval before posting.
Questions may be sent to Please provide detailed information.

powered by Disqus


6450 Papermill Drive Knoxville, TN 37919 Phone - (865) 450-8888; Fax - (865) 450-8869
Copyright © 2014 WVLT-TV Inc. - Designed by Gray Digital Media - Powered by Clickability 9219331 -
Gray Television, Inc.