Editor’s note: This story was corrected on Tuesday, Feb. 20, 2024, to correct the attribution of a quote.

Allegheny Township officials, and at least one resident, want to know why the township apparently is being fined $51,000 by the IRS.

The fines might be connected to the township not properly withholding taxes from employee paychecks, interim township Manager Jason Dailey said.

He said a notice of the fines only recently was received by the township and references the township’s failure to submit withholding income tax payments for various quarters over three years, most recently in the first quarter of 2023.

Federal tax law requires most employers, including government, to deduct federal income taxes from employees’ paychecks and pay that money directly to the federal government. Employees can determine approximately how much is deducted based upon how they plan to file their federal tax returns each year.

Dailey said the township is investigating the matter.

Supervisors Chairman Jamie Morabito said the township is looking into the cause of the fines but noted previous township administrations “may have dropped the ball.”

“We’re going to be basically doing two audits: one through the Local Government Academy and one through (the township’s appointed auditing firm),” Morabito said.

An IRS official declined to comment on the fines Wednesday, citing a confidentiality provision in federal law that prohibits the agency from commenting on specific enforcement actions.

The matter came to light Monday, when the township’s elected auditor, Liane Newell, complained at a supervisors meeting that she was denied access to the township’s financial records.

“There’s $50,000 in penalties (against the township), but we don’t know why that is because they won’t let us see anything,” Newell said, addressing the supervisors and about 40 residents at the meeting.

Newell argued she has the right to review the records under her office as elected auditor, since the township failed to appoint an auditor to scrutinize the books at its January reorganization meeting.

Newell said she requested the information last month from Dailey, who denied her request about 10 days later.

Newly appointed township solicitor Craig Alexander agreed with Newell’s contention she was entitled to the information, but only if there was no outside auditor. Alexander said he advised Dailey to withhold the information, since the township’s appointed auditor, DeBlasio & DeBlasio Associates, holds an “at-will position” and will continue to do so unless supervisors vote otherwise.

Under state law, townships can opt to appoint an auditor even though state election law continues to require the election of one.

Regarding Newell’s complaint, Morabito said the appointment of a professional auditor should have happened at the reorganization meeting but had “fallen through the cracks” and was left off the agenda.

Prior to Newell speaking Monday, the supervisors unanimously appointed DeBlasio & DeBlasio to audit the township’s books for 2023.

Township Supervisor Mike Korns, who joined the board in 2020 and is its longest tenured member, said, “We appoint DeBlasio & DeBlasio every year for I don’t know how many years.”

Newell expressed concern the public won’t get answers about the fines.

“If you want to know anything, you’d better file a Right-to-Know request, because they are not going to let you see anything,” an angry Newell said.

Under Pennsylvania law, most government financial records are public, but that likely won’t help shed light on Allegheny Township’s issue because the records most vital to any inquiry about income taxes — federal W2 forms — are not covered under the state’s Right-to-Know Law, said Melissa Melewsky, media law counsel at the Pennsylvania NewsMedia Association.

Melewsky said only the township’s current auditor would be able to view them.

Dailey cautioned against leaping to any conclusions about the fines given the changes made by the township regarding payroll processing.

“The township had gone from in-house payroll to outsourcing payroll issues,” Dailey said. “I don’t know if it was an internal issue, and sometimes these are an IRS issue.

“There’s a lot more work that needs to be done to really get to the bottom of this.”

Staff writer Jack Troy contributed to this report.

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