By SAXON DAUGHERTY
Staff writer
Forest County has reached a settlement with the Internal Revenue Service following a dispute over recent audit findings.
During Thursday’s commissioners meeting, chairman Bob Snyder said the county signed off on the agreement March 27 that will result in a $2,507 fine for a previous public defender that received a monthly stipend for office expenses.
In October, the IRS evaluated the county’s financial records from the 2014 fiscal year and pointed out 10 different positions it didn’t believe were classified correctly.
The auditor took issue with subcontractors not being considered county employees, including guardian-ad-litem, public defenders, court-appointed attorneys and the county solicitor.
As a result, the IRS was set to fine the county upward of $40,000 for the violations.
An $11,000 settlement was later offered, in which the IRS would not look at the county’s 2015 or 2016 financial records, but would return this year to make sure necessary changes were made.
The county conceded there were some minor problems discovered in the audit, but it is generally opposed to what the IRS is suggesting about the classification of subcontractors as county employees.
The county fought the findings and the County Commissioners Association of Pennsylvania (CCAP) provided a tax law attorney for assistance.
The attorney would later justify the classification of the guardian-ad-litem, public defenders, court-appointed attorneys and the county solicitor as sub contractors.
All those positions will remain in that capacity, while the only change will making the DUI alcohol instructor a part-time employee for the purposes of helping with Alcohol Safety School.
Commissioner Basil Huffman said the IRS will likely be returning in three years to make sure everything is order.
“I’m confident there won’t be any problems,” Snyder said.
The county is working with the law firm Smigel, Anderson and Sacks to ensure that all contracts are compliant.