Friday, January 13, 2006

Tax Evasion

On the 1st of February last year, I realized that The Corporate Overlords had never deducted my City of Pittsburgh Occupation Tax out of any of my paychecks for the 6 years I have been working for the Help Desk. I hadn't noticed previously because in 20 years of working within the City limits, my employers had always taken care of their tax obligations.

Well, over the course of two months, I sent out numerous e-mails to HR, the Payroll Manager, Employee Relations and others alerting them to this problem. I received no response. When I finally had a meeting with the then new Site Manager T*** in August, he assured me that he was going to leverage an answer for me. He was out the door a month or so later because he hadn't been qualified to do the job.

Today was my first paycheck of 2006 and sure enough, the City's Emergency & Municipal Services Tax was not deducted. I alerted the local HR Rep (officially titled the "Operations Manager") of this and, with the all too typical surprised look on her face, she said that she though she had told me that WE would be responsible for the taxes. I said, "No. You never said anything like that to me and I certainly haven't received any documentation to that effect." After that little conversation, I again sent out a series of e-mails in which I said:

As of 1 January 2005, what was previously known as the Occupation Privilege Tax had been changed under City Code Title II, Article VII, Chapter 252 to the Emergency & Municipal Services Tax. According to Article III, Section 301 of the Regulations, “All employers and self-employed individuals are required to collect the Emergency and Municipal Services Tax from all employees engaged in an occupation within the City of Pittsburgh.” Section 303 goes on to say “Any employer required to withhold the taxes in accordance with the City Code and with these Regulations shall be personally liable for payment of the tax in the event he fails, refuses or neglects to withhold or transmit the tax or any portion thereof, in addition to the interest and penalties.”
Perhaps quoting the law, chapter and verse, will get the Corporate Overlords to notice. I actually doubt it. That's why I went ahead and called the Audit Section of the City of Pittsburgh Department of Finance. The guy there was very pleased to take my anonymous report that an employer in the city had been shirking their tax obligation for the past seven years or so. "We love doing audits," he said.

In point of fact, even though the employer is legally responsible for withholding the tax from employee's paychecks, the employee is still responsible for the paying of the tax. My tax burden for the unpaid Occupation Tax of $10/year through 2004 and the Municipal Services Tax of $52/year from 2005 on is $152 total. The math for the assessment of penalties and interest is a bit tricky to understand but it can't be more than another $75 on top of the tax responsibility. Lets say $200 total. The pain of that is more than offset by the warm feeling I have from knowing that City auditors and lawyers will be descending upon my delinquent

I warned them.

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