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Failure to better monitor county-owned vehicles could cost taxpayers:
A request by Washington County Commissioner Joe Sheffield for a list of county-owned vehicles has revealed the county is not in compliance with IRS regulations regarding employee use of many of those vehicles.
“We are very concerned with how the county is reporting to the IRS information on vehicles being driven home,” County Attorney John Rambo said during the April 3 meeting of the County-Owned Property Committee. “We have some work to do to comply with the law.”
During a committee meeting in February, Sheffield questioned whether taxes are supposed to be paid by the vehicle users, and Mayor Dan Eldridge suggested asking auditors for specific guidance on IRS requirements.
A letter from Blackburn, Childers and Steagall was reviewed during the March meeting of the Oversight and Steering Committee, and the issue was referred to the County-Owned Property Committee.
During last week’s meeting, Chair Mark Ferguson said several commissioners feel like the vehicles should be clearly marked, possibly with a seal on the door, as to what department is using them.
“Do the employees who take county-owned vehicles home know the cars are not to be operated for personal use?” he asked Rambo.
“It needs to be in writing because the county will be charged for the taxes,” Rambo responded.
According to the letter from BCS, a review of the list of vehicles in use by Washington County indicates not all departments provided a complete listing of employees assigned to vehicles. This information is needed to verify that all employees are properly reporting any personal use of vehicles on their W-2s.
The IRS reference guide for public employers indicates personal use of a government-owned vehicle is normally a taxable fringe benefit. Though there are exclusions, in most cases the value of the benefit would be included in the employee’s wages.
BCS recommends further investigation of their finding that at least one Washington County employee appears to be receiving a taxable fringe benefit of a government-owned vehicle that was not properly reported on the employee’s W-2.
In addition, the review of the list of vehicles covered under the county’s insurance policy noted that many vehicles listed as insured were not included on lists of vehicles provided by department heads.
“I need the county commission to step up and (insist) the office holders comply,” Eldridge said, adding the county taxpayers will be responsible for the consequences.
Sheffield made a motion for Rambo to draft a resolution for a policy, using information from BCS and related legal requirements. The motion was seconded by Commissioner Alpha Bridger and passed unanimously.
Rambo said it would make sense to implement the guidelines in two phases, with the first for all departments other than the Washington County Sheriff’s Office. The second phase would apply to the WCSO, which has different requirements related to law enforcement officers who must operate unmarked vehicles.