[NA]Employer failure to collect FIT[NA]

[Let'sgoflying!]

If university employer discovers they were supposed to be collecting taxes on a taxable benefit (housing) years after it has been going on, and then corrects the situation....who is responsible for unpaid taxes should the IRS discover it?
This is a situation that only 'interests me', it does not affect me and I am not going to take anyone's suggestion to 'refer to a cpa or attorney' thank you very much. Also, let's presume the U. is correct; this is a taxable benefit - I have read sec 119 etc on how that is determined....let's ignore that and make it a hypothetical situation if you must.
What is your opinion? Ever heard of it?

 

[Matthew]

My take on the IRS - they want their money. If somebody gets a taxable benefit, they are the one that owes taxes on it, not who should have been withholding it. I don't know how far back they can go, though.

 

[Shawn]

Barring any statute of limitations they are gonna go after the employee without question for taxes due. The employee may have a basis for a lawsuit against the employer, but that is separate from whom the IRS will be sending the bill...plus penalties and interest to.

 

[UngaWunga]

Why are you asking tax questions to a pilot forum, when you should be talking to a professional that knows what he/she is talking about?

 

[Clark1961]

Oh boy...nasty tax law....it's been a long time since I received housing but I seem to recall something about "employer's convenience" or some such term. My housing offshore or overseas was not taxed. Any housing domestic onshore would have been taxed since I would have had to pay for available equivalent housing from my taxed income.

As for withholding, well, under federal law the employee is still responsible for the taxes. The employer may be liable for civil and/or criminal penalties but that would be rare for a public institution.

I am not a lawyer or CPA. YMWV, hire your own damn CPA/lawyer or at least read the relevant statutes yerself...blah, blah, blah

 

[JimNtexas]

Assuming there isn't any fraud nor very large sums of money involved here, then the IRS can only audit your last three returns.

You should amend your last three returns to report this taxable benefit, pay your taxes, and then go forward and sin no more.

[Commercial] This is exactly the kind of thing that an Enrolled Agent is well suited to handle. [/Commerical]

You don't need lawyer for a simple tax issue like this.

If you have a contract with the University then that might be worth a look to see if you have any sort of claim against them.

 

[Warrior]

I know of 3 people who failed to withhold taxes on their employees and more or less paid them in cash. The IRS came after the employers for the unpaid taxes and created a huge bill by the time the IRS added in interest and penalties.

I suspect that the employees had some sort of obligation also but I don't know the details.

As others have said if there really is a situation like that it is time to get some knowledgeable advice.