A representative from the Internal Revenue Service met with city officials in York this week to discuss unpaid payroll taxes.
"They want the problem addressed now, but not in its entirety," said city administrator Tim Sweezey. "What they're going to do is work through the problems with us."
Sweezey and York Mayor Glenda Dubose say they first found out about the problem in October of 2011.
"We have a city clerk who is no longer with us. She was doing them (payroll taxes) in the beginning, but somewhere along the way she stopped and she did not communicate this with anyone," said Dubose.
Currently the IRS is seeking unpaid payroll taxes for the latter part of 2010, all of 2011, and the first part of this year.
"We have retained an accounting firm which is helping us sort out these 941s. Get things back on track so we don't repeat the same errors," said Sweezey.
Sweezey and Dubose say the visit by the IRS official was an effort to speed up the repayment process, which they say has been delayed.
"What we learned is that bank statements had not been reconciled," Dubose said. "Deposits had not been filed. So, when this accounting firm came, we hired them and they had a big job ahead of them."
Because of the economy, the mayor and administrator say, like other cities, York is cash strapped. However, they admit that combined with its money woes in recent years, repaying the IRS poses a challenge.
"We may have to (cut services)," said Dubose. "We're hoping we don't get to that, but we may have to do that and we just have to do it."
With an accounting firm hired to address the issue, Mayor Dubose says the city's top priority is paying $41,000 owed for 2010. York officials say what is owed for 2011 is still being determined.