NewsMontana News


Some Great Falls school employees warned of owing taxes due to "unreported retirement benefits"

It's the kind of letter that would make anyone stop in their tracks
Posted at 12:28 PM, Aug 15, 2019
and last updated 2019-08-15 14:39:07-04

It's the kind of letter that would make anyone stop in their tracks.

"I opened it up, I had a little surprise," said Penny Cooper, a retired teacher with the Great Falls Public Schools district.

Cooper recently received a notice saying she had collected unreported retirement benefits from Great Falls Public Schools in 2017 and owed taxes on the benefits.

"Over an $8,000 proposed taxes due letter from the IRS," she said.

And Penny isn't alone -- GFPS officials say they've had calls and visits from past and current employees who have also gotten letters since April.

"We did not know the extent of these letters and how many employees and who had received the letters," said GFPS Superintendent Tom Moore.

District officials contacted the IRS that same month, but GFPS Director of Business Operations Brian Patrick says they had no luck finding out which employees would receive the notices.

“We tried to contact the IRS to get that information and the IRS was unable or unwilling to give us that information," he said.

GFPS officials were also directed by the IRS to give people like Penny a letter disputing the proposed taxes that they could mail back to the IRS.

Moore says the business office has given out around 600 of those dispute letters so far; they estimate around 2,000 people will receive letters claiming to owe taxes to the IRS

Penny says she would have appreciated a heads up before receiving her letter from the IRS.

Moore says they did try to notify those affected by posting onto their district’s website several months ago, but no precautionary letter was mailed out.

“We don't have information to notify these folks. We don't know who they are,” he said. “And to send a letter to current and past employees about something that we didn't have good information on doesn't make any sense"

Penny doesn't have a computer and says she found out about the GFPS website posting when she went up to the district building with her letter.

"I was out of the loop up until I tracked down what to do myself,” she said. “And I don't think that's really fair."

It wasn't until recently that the district found out more about the letters and who would receive them.

"We don't believe it was malicious, it definitely was not a hack,” said Patrick. “It was a mistake made in a process that we have."

The investigation is ongoing and the IRS has told MTN News they decline to comment, citing privacy violations.

"We're in the process now of contacting all employees that we know will get the letters," said Patrick.

"I would like to know what happened, and where did my information go, is it going someplace else besides the IRS," said Penny.

School officials say they will work to move forward after the investigation is complete.

"Once teachers get back into the district there’s an internal information system that we use to distribute things,” said Moore. “We will also post things on our website and if we believe it's prudent to send every district employee a letter explaining this to them, we will."

GFPS employees that receive a letter from the IRS claiming they owe money should contact Katie Allen in the Payroll Department at 406-268-6064.

Here is the full text of the notice posted on the GFPS website :

It has come to our attention that a number of our employees are receiving information from the Internal Revenue Service (IRS) that indicates they received a retirement distribution from Great Falls Public Schools in 2017. The District does not issue retirement distributions, so these letters are clearly incorrect as we do not send out these forms. We are working with the IRS to determine the cause of this problem. Initially, the information was sent to a few people who worked for the District in 2013, but since then, current employees have been receiving the IRS information as well.

We have been working with the IRS Fraud Department since April to resolve this matter. We have been directed by the IRS to provide our employees a letter from the District that indicates the employee did not receive a retirement distribution from Great Falls Public Schools. Ideally, the IRS would provide us a list of our employees who will be receiving the letter, but as of yet, they have not released that information.

If you have received a letter from the IRS, please contact Katie Allen (6064) in the Payroll Department. She will provide you with a letter from the school district to be sent to the IRS. The letter indicates the school district did not issue the 1099-R forms. We apologize for any inconvenience this has caused you and thank you for your consideration as we both work through this situation.

Updates will be provided as we learn additional information on this matter.

Brian Patrick

Director of Business Operations
Great Falls Public Schools