AASBO 2010 WINTER CONFERENCE IRS AUDITS FSLG KIM SAVAGE

THE EXAMINATION PROCESS  Examination Selection Process  Examination Issues and Periods  Examination Outcomes and/or Sanctions

FORM W-4 COMPLIANCE  Exempt Certificates  Invalid Certificates  None U.S. Person Employees

STUDENT FICA EXCLUSION  Summer Employment

MISCLASSIFIED WORKERS OR PAYMENTS  Coaches  Sport or Special Event Workers  Part-time Hourly Wage Earners  Section 3401(d) Employees

GROUP TERM LIFE INSURANCE  Employer Paid Benefit >$50,000  Employee Paid Elective 125 Plan Benefit

CASH EQUIVALENT FRINGE BENEFITS  Gift Cards  Awards Paid as 3401(d) Employer

Employee Allowances  Vehicle  Cell Phone  Other

Employer Provide Cell Phone  Personal Use Policy w/ Substantial Restrictions  Employee Explicit Acknowledgement of the Policy  Employee Procedure/Process to Monitor Policy Compliance  Policy Requirement for Employee Disclosure of Personal Use  Procedure to Identify, Compute, and Include Taxable Wage Amount

EMPLOYEE TAKE HOME VEHICLES  Condition of Employment Requirement to Commute in an Employer Vehicle  Written Policy Prohibiting Other Personal Use  Employee Compliance w/ the Policy  Non-Personal Use Vehicle  Permissible Valuation Methods for Taxable Benefit

SAME DAY MEAL REIMBURSEMENTS/ALLOWANCES  General Rule – Taxable Fringe Benefit  Exceptions: 1. Qualified Business Entertainment 2. Meeting Attendance – Meals in Kind 3. Qualified De Minimus Meal Reimbursements See State Department of Administration Policy

EMPLOYER PROVIDED EMPLOYEE HOUSING  General Rule = Taxable Fringe Benefit  Internal Revenue Code Section 119(a)  Internal Revenue Code Section 119(d)  Campus Housing Adequate Rent  Employer Paid Utilities

INFORMATION RETURN COMPLIANCE  Payments Subject to Reporting  Recipient “Types” Subject to Reporting  Sanctions for Non- Compliance – Civil Penalties and Back-up Withholding Taxes  School District Area of Compliance Failures – Auxiliary and/or Activity Accounts

FORM 1099MISC  Verify TINS Used are Possible Numbers  Verify Recipients’ Names and TINs are Consistent  Impose Back-up Withholding if No Valid TIN on File when Possible  Payments Reportable to Corporations  Payments for Services to LLCs

FORM 1099MISC  Deceased Employee’s Wages Paid to Estate or Beneficiary  Not Used for Payments to Non-Resident Aliens

For More Information  Instructions: Forms W-2, W-3, W-4 & 941  Pub 15 Employer’s Tax Guide  Pub 15-A Employer’s Supplemental Tax Guide  Pub 15-B Employer’s Tax Guide to Fringe Benefits  Pub 963 Federal-State Reference Guide  FSLG Fringe Benefit Guide

Need Help?   “How to Reach Us”  SSA National Employer Information Line   Phone your FSLG Specialist -Kim Savage Wayne Woods Robert Reinart

THANK YOU