OU will pay $1.054 million to the IRS following an audit of the university’s 2011 and 2012 fiscal years.
Ohio University will pay the federal government more than $1 million on behalf of its employees following an Internal Revenue Service audit of the 2011 and 2012 fiscal years.
OU’s Board of Trustees agreed to pay up after an IRS audit showed university employees did not pay appropriate Medicare and social security taxes. The audit also found employees failed to report thousands of dollars in taxable benefits, including vehicles.
“No one will incur personal expense,” said David Brightbill, chair of the board, after last Thursday’s board meeting. “(The) university will apply corrected tax returns.”
University “executives” failed to report “fringe benefits,” including vehicles for personal use and insurance benefits, as Medicare taxable income, according to a university news release. The university did not provide the names of those seven executives.
In addition, other unnamed employees didn’t report similar benefits including “rental payments, clothing or uniforms.” These findings resulted in a total tax payment of $51,360.
The university settled with the IRS in the amount of slightly more than $1 million for findings from the audit period. The settlement included tax reporting issues in six different areas.
Multiple OU officials and administrators were not reached by press time.
“The university was not assessed penalties by the IRS as a result of the audit,” said Colleen Bendl, the university’s chief human resource officer. Instead, the university settled with the federal tax agency.
The largest single settlement with the IRS came in the form of paying $597,921.35 for university employees failing to report certain contributions to the university’s Early Retirement Incentive Program. The program is a retirement plan for non-profit organizations, often at universities, and is similar to a 401(k) plan.
The IRS also found that summer workers, many of who are students, employed by OU did not meet social security and Medicare tax exemptions, yet they reported their income as tax exempt anyway. The failure to report that income resulted in a $176,640.25 tax settlement covering more than 1,100 workers.
For more, read the university’s full statement on the audit at http://www.ohio.edu/compass/stories/14-15/8/IRS-employment-audit.cfm.