A routine Internal Revenue Service audit of Eastern Michigan
University for the years 2002-2004 identified issues related
to the payment of taxes.
"The IRS audited four different areas and found that,
in some circumstances, EMU had not paid the taxes correctly," said
Janice M. Stroh, vice president for business and finance.
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Stroh |
"All of the processes and procedures that precipitated
these findings have been changed to ensure proper taxes
are being withheld."
The IRS reviewed the following areas:
- taxes related to student employees
- taxes related to presidential compensation
- taxes related to awards of $600 or more
- taxes related to non-incorporated vendors and foreign
vendors
"The largest components of the audit findings relate to
the unpaid taxes for student employment and non-incorporated
vendor payments," Stroh said.
The student employment tax issue was corrected in 2003
and the policy and procedure for the non-incorporated vendor
finding was corrected in 2006.
To mitigate the non-incorporated vendor finding, Stroh
said the University is attempting to contact the 120 vendors
identified by the IRS to verify their payment of taxes
and reduce the liability to the university.
One problem, Stroh said, is that some of the companies
have gone out of business since 2004.
While it is too early to tell how much EMU
will have to pay in back taxes, Stroh said the IRS will
levy a fine of $19,400 against EMU.
"We have closed all of the loops that led to these situations
and this won't happen again," said Stroh, who joined EMU
in January 2007.
