📰BIDDEFORD | IRS fines city over $700,000

January 28, 2026, According to city officials, the city of Biddeford has been fined by the IRS for a "late filing" in 2021. The penalty assessed by the IRS totals $709,240, plus $543.16 in accrued interest as of April 15, 2024, please see full breakdown below:

According to City Manager Truc Dever, the City received the following notices:

CP215 dated April 8, 2024- Penalty under IRC Section 6721 for failure to file correct information returns: $354,760

CP215 dated April 15, 2024- Penalty under IRC Section 6722 for failure to furnish payee statements: $354,480

Dever went on to explain that the “total penalty assessment was $709,240, plus $543.16 in accrued interest as of April 15, 2024."

According to officials, the reason for the penalty/fine is “former staff had failed to file the required forms 1094-C and 1095-C for tax years 2020 and 2021.”

City Manager Dever stated, current management was unaware of the oversight until the IRS notices were received… As you know, the City’s Finance Dept. experienced significant turnover since 2020, including key personnel for payroll reporting… As a result, institutional knowledge was lost, and critical reporting responsibilities were not properly transitioned or fulfilled.

Additional Information regarding the balance, payments made, and what steps the city officials are taking to alleviate the situation:

In September 2025, the city received notice from the IRS that the City had overpayments in the amount of $241,197.44 (tax refund) and that they automatically applied those funds to the penalty balance.

As of the “tax refund payment”, the balance due is now $525,085.74 (as of that date) with interest that continues to compound.

Truc expressed she is waiting to “hear from the IRS on our case and hope we can have this forgiven…. The steps we have taken to correct the internal issues have been the following:

-When we discovered the issue, the City took immediate corrective action. All required employee statements have been provided and all federal payroll tax payments have been made in full and on-time.

-We have hired an experienced Finance Director

-Engaged a forensic accountant to assist in reconciling the financial records and completing the City’s FY audits.

-Implemented new internal controls and SOPs to ensure future compliance.

-City is transitioning to new payroll software to support accurate and timely reporting."

This story will be updated as more information arises.