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County Administrator's Report 11. 2.
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| BCC Regular Meeting |
Discussion |
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| RECOMMENDATION: |
Recommendation Concerning the Internal Revenue Service Employment Tax Audit - Michael D. Weaver, Public Safety Department Director
That the Board take the following action concerning the Internal Revenue Service (IRS) employment tax examination:
A. Approve and authorize the Chairman to sign the Closing Agreement on Final Determination Covering Specific Matters;
B. Authorize the Chairman to sign IRS Form 2504-WC, Agreement to Assessment and Collection of Additional Employment Tax and Acceptance of Overassessment in Worker Classification Cases;
C. Authorize the Chairman to sign IRS Form 2504, Agreement to Assessment and Collection of Additional Tax and Acceptance of Overassessment;
D. Approve the Policy Change that allows credit for calls based on the number of hours at the Fire Station and to abolish the procedure for hourly pay for volunteer instructors; and
E. Authorize the Office of Management and Budget to process the transfer of funds on Budget Amendment #056, in the amount of $545,000, ($100,000 from Fire Fighter Stipends and $445,000 from Reserves) to Other Salaries and Wages and FICA to cover the IRS Tax Assessment, Fire Protection Fund (143), Cost Center 330206. This Amendment increases Personal Services in the amount of $545,000, for Fire Rescue.
[Funding Source: Fund 143, Fire Protection Fund, Cost Center 330206, Fire Rescue Operations] |
| BACKGROUND: |
On June 16, 2014, the IRS notified the County of pending audit concerning the taxation status of the stipend monies paid to the volunteer firefighters for calendar year 2012. On December 17, 2014, the IRS delivered the County a settlement Agreement for their findings. For taxes and withholdings that should have been made in calendar year 2012, the County has been assessed a total of $78,793.40. Of this amount $47,096.32 should have been paid for volunteer stipends and $31,697.08 should have been paid for employees who received both a 1099 and a W-2 from the County.
The findings stated:
A. Stipend payments made to volunteers should have been treated as wages and relevant employment taxes should have been withheld and paid.
B. Volunteers are employees with the meaning of section 3121 (d)(4) and 3401 (c) of the IRS code.
The IRS has agreed not to pursue any action on this matter for the periods January 1, 2011, through December 31, 2014. |
| BUDGETARY IMPACT: |
| Funds are available in Fund 143 Reserves, Fire Protection Fund, Cost Center 330206, Fire Rescue Operations. |
| LEGAL CONSIDERATIONS/SIGN-OFF: |
| N/A |
| PERSONNEL: |
| N/A |
| POLICY/REQUIREMENT FOR BOARD ACTION: |
| The Board approve the policy change and the authorize the Chairmain to sign the IRS Closing Agreement, Form 2504-WC, and Form 2504. |
| IMPLEMENTATION/COORDINATION: |
| Upon BCC approval and proper execution, Tamika L. Williams, Public Safety Business Operations Division Manager, will ensure the IRS forms and payment are remitted to the Internal Revenue Services. |
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