Worcester Pays up $356,000 in Taxes


The city of Worcester owed the IRS $356,570 because it failed to classify certain job-related allowances paid to employees as part of their reported incomes, made errors in Medicare withholdings for some of its employees and did not report vendor payments in its 1099 Form. In addition, the city allowed 11 of its municipal workers 24 hour use of city vehicles for emergencies but they were not assessed $3 per day on their W-2 Forms. And employees who were claiming full exemption from IRS withholdings of income taxes did not supply annual W-4 flings with the city as required.

These issues were discovered when the IRS conducted an audit on the city’s 1099 and W-2 flings for 2007. During the audit, the IRS reviewed more than $500 million paid by the city in wages, employee reimbursements and vendor payments that year.

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