Treasurer: county still awaiting formal IRS abatement letter; assessed penalty cited at $862,000

Hays County Treasurer Daphne Binodio briefed the Commissioners Court on an ongoing IRS abatement process tied to electronic W‑2 filing for calendar year 2022. Binodio said county staff had applied for an IRS password to file electronically but did not receive it in time and instead submitted paperwork under an approved variance; the IRS later sent penalty notices and the county has been pursuing abatement.

"We are still in the abatement process, and currently, we are sitting at an $862,000 fine," Binodio told the court, adding that the county had provided a large binder of documentation and had previously received verbal abatement approval. She said the county had requested formal letters from the IRS and that turnover and agency furloughs have complicated the timeline; she expected another meeting with IRS staff in roughly three weeks and offered to include county counsel and audit staff in that call.

Commissioners expressed concern about budget exposure if the abatement is denied and whether the penalty should be budgeted into FY27; staff said they would report back after the scheduled IRS discussion. Binodio also reported operational disruptions after a banking-platform change but said she remained "strongly behind Sage Capital" as the county's bank while staff worked through ACH, HSA and retiree-debit issues.