By Connor Currier
Moriarty City Clerk/Treasurer Deborah Liu told councilors and the mayor at Moriarty’s City Council meeting on Wednesday night that the city has failed to disclose thousands of dollars in fines from the IRS and has short-changed employees at least $18,000 in take-home pay because of lax internal controls going back years.
Liu, who came into office in December, said she discovered years of correspondence with the IRS detailing incorrectly paid taxes and there was no record that staff had previously informed the mayor or the city clerk. IRS documents show that in 2023, the City of Moriarty had thousands of dollars worth of fines from the IRS.
For example, a recent letter from the IRS to the city reviewed by The Indy shows that the city sent the IRS $153,464 collected from employee’s federal payroll taxes for the first quarter of 2025, but they should have collected and paid just $140,014, or about $18,000 less, likely indicating that the city is withholding more money from each employee’s paycheck than required, Liu explained. The IRS also assessed penalties of over $7,400 against the city for the improper filings and payment. This over-withholding reduces the employee’s take-home pay, as a larger portion of their earnings is being set aside for taxes rather than going directly into their pocket.
Other correspondence reviewed by The Indy indicate that the city may have been aware of payroll tax improprieties going back as far as 2023. In October 2024, the city was issued and paid a fine of $545 from the IRS for “failure to make a proper tax deposit” for the pay period ending June 30, 2023. Liu says there is no record that any action other than paying the fine was ever taken to investigate or correct the issue.
Liu told The Indy that the city may owe employees back pay for taxes that were improperly withheld from their paychecks.
Liu says her main priority is “cleaning 20 years of fiscal irresponsibility” and accuses that “nobody has been really focused on really understanding” the city’s financial activities.
She specifically accuses the former mayor and former city clerk of not doing their due diligence in respecting constituents and maintaining proper financial records. She emphasizes that everything discovered is “before my time” and she is actively working to clean up the city’s financial mismanagement.
Moriarty Mayor Brandon S. Webb called for an “internal investigation.”
