Newport News retirees may owe back taxes because of clerical error [Daily Press (Newport News, Va.)]
By Joe Lawlor, Daily Press (Newport News, Va.) | |
McClatchy-Tribune Information Services |
The benefits -- worth about
"It's never been excludable from income but unfortunately the city treated it as such," Mitchell said.
Mitchell said the mistake was noticed in time to issue amended forms so that those retirees paid the correct taxes on their 2011 income. City Manager
"If it's taxable income, you're supposed to file an amended statement," Hill said. He said he had "no idea" whether the
An
When asked why the city only corrected the error for 2011, Morgan said issuing amended forms for previous years would have been confusing for the more than 1,000 pre-65 retirees affected.
"We didn't want to be in the position of giving people tax advice," Morgan said. "None of the parties, either the city or the retirees, did this willfully, so I hope that's taken into account. Hopefully the tax implications aren't too significant."
Morgan said he believes in many cases it wouldn't affect the retiree's tax burden that much.
"Every time the city makes a mistake, it always ends up being on the backs of the employees," Burbic said.
Morgan said he didn't know how the city would respond if the
He said if penalties were assessed for being late, the city would consider reimbursing those costs.
Hill, the CPA, said even if the city issued incorrect forms, ultimately it's the individual taxpayer's liability and responsibility.
"I'm just letting it ride and seeing what happens," Manecke said. "Maybe one day the
The news came on the heels of the city announcing that premiums would increase by about 50 percent, according to a letter Morgan signed late last year. The self-insurance pool had a lot of claims in 2011, driving costs up, officials said.
Mitchell said the good news for 2012 is that premiums are staying the same, and employees and pre-65 retirees have additional plans to choose from that cost less per month. The new plans have higher deductibles or fewer physician choices.
Mitchell said in the future, the city plans to increase incentives for healthy living, which would help control health care costs.
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