The Rockport City Council, at its regular meeting Tuesday Aug. 27, took action to address an issue created by the Texas Municipal League MultiState Intergovernmental Employee Benefits Pool (TML IEBP) after TML IEBP staff failed to file required health insurance paperwork in a timely manner.

The city, as well as many other Texas cities, received a letter from the IRS outlining large fines for the failure to take care of the required paperwork. That responsibility is TML IEBP’s, the group through which the city buys its employee health, dental, vision and life insurance.

The city received IRS Notice 972CG on July 31 proposing a penalty of $41,080 for 2017 information returns filed incorrectly.

The city contacted the TML IEBP and that organization acknowledged an administrative error in filing the necessary forms with the IRS.

The Texas Municipal League (TML) is working with tax attorneys at the law firm Mitchell, Williams, Selig, Gates & Woodward, P.L.L.C. to communicate with the IRS on the city’s behalf and the behalf of the other impacted TML pool members to resolve the proposed IRS penalty notices relating to the late filing of 2017 IRS Form 1095-C.

The council approved a resolution authorizing the city to engage the law firm to represent Rockport before the IRS with respect to resolving the proposed IRS penalties, and authorized Mayor Pat Rios to execute a Form 2848-IRS Power of Attorney for the purpose of granting the attorneys listed to represent the city before the IRS solely with respect to any proposed penalties for tax years 2016 and 2017.

There is no financial impact to the city for taking this action, but the TML IEBP could raise its rates next year due to expenses incurred.

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