IRS audit identifies issues with EMU's taxes for 2002-2004
YPSILANTI - 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 of business and finance.
“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 some of the companies have gone out of business since 2004.
While it is too early to tell how much of the back taxes EMU will have to pay, 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.
Eastern Michigan University is a public, comprehensive university that offers programs in the arts, sciences and professions. EMU prepares students with the intellectual skills and practical experiences to succeed in their careers and lives, and to be better citizens.
Eastern Michigan University is a public, comprehensive university that offers programs in the arts, sciences and professions. EMU prepares students with the intellectual skills and practical experiences to succeed in their career and lives, and to be better citizens.
Editor's Note: Looking for an expert source for a story? Check out EMU's Eastern Experts online at www.emich.edu/univcomm/easternexperts.