I have been trying to understand exactly what happened in the "under-withholding" that the sheriff reported, and the ensuing confusion over repayment to the IRS.
The official explanations were as clear as mud, and in fact misleading.
Nothing was "under-withheld". Income was incorrectly reported on Sheriff’s employees pay stubs and W-2’s for 10 years. Ten years until an employee looked at her pay stub and realized that it was incorrect.
Ten years without, apparently, any oversight that would have caught this error.
From what I am able to gather from people in the know, the sheriff agreed in 2002 to start paying 2% that employees had been paying toward retirement. The problem was, that although the sheriff paid the retirement system, employees’ pay still reflected that 2% as deferred income, rather than as taxable income. The result of this, of course, was that when these employees filed their yearly return, the income they reported was actually lower than it should have been.
The IRS only has records, according to the sheriff, for the last 3 years. The cumulative total of what is owed for 2008, 2009 and 2010, and I would assume that this would include interest and penalties, is $689,000.
Employees were given the option to pay their share by December 5th, or alternately to have 2% deducted from their pay until it is paid. This, supposedly, was part of an agreement reached with the IRS. How it will be credited to each individual employee, I have no idea. Why the sheriff couldn’t just issue corrected W-2’s and let each employee deal with it at tax time, I have no idea.
Of course, to add insult to injury in a manner that only Larry Deen could come up with, was his ‘joking’ statement to deputies that their paycheck would have a bonus included. Just joking.
Oh, and they won’t get that raise next year. Although they are paying their part of the money owed, someone has to pay the interest and penalties. That will be offset by deputies not receiving a raise.
Meanwhile, Larry Deen is sitting on almost half a million dollars in unused campaign contributions. The law closely governs how he can disburse that money to certain non-profit and charitable donations.
Shame he can’t donate it to the Sheriff’s office or to a non-profit set up for that purpose, and relieve the employees of about 2/3 of their burden.