W-2 Tax Form

Some county employees have been using county vehicles for personal use while not on official business, according to an outside audit released last week.

Moreover, the audit found that the “county failed to report” on tax forms the personal use of those vehicles.

The county is not in compliance with the Internal Revenue Code, according to the audit conducted by Nichols, Stopp, & VanHoy of St. Louis.

However, the auditor, Eric Stopp, said he was not very concerned about the tax compliance issue. He said his bigger concern dealt with liability that may fall on the county if an employee was in a wreck while in a county vehicle.

The audit recommended that the county “consult with a tax adviser regarding the inclusion of personal benefits on employees’ W-2s.”

The county commission’s response to the audit was that “certain employees are already being taxed on the benefits provided through the vehicle-use policy.”

First District County Commissioner Tim Brinker said he does not know which employees or departments may be using the vehicles for personal use. Brinker added that he does not know where the issue stems from.

However, he said employees under the county’s personnel policy have automobile rules to go by.

Presiding County Commissioner John Griesheimer said some county employees drive vehicles back and forth from home to work, which is a personal use allowed under the county’s policy.

But beyond that Griesheimer said he is not aware of any other personal use of county vehicles.

Certain county employees and officeholders can keep a county-owned vehicle at their residences, under the county’s policy.

Those positions include the county commissioners, sheriff, prosecuting attorney, public works engineer, highway administrator, building commissioner and director of emergency management.

An elected official or department head may allow other employees to drive county-owned vehicles home outside of normal working hours.

Griesheimer said he was unaware until the audit that the personal use of vehicles has not been reported on employees’ W-2s.

In its response to the audit, the county commission stated, “The county counselor has been directed to obtain the necessary tax advice to ensure that the existing policy is in compliance with both state and federal tax codes. Once the policy has been revised as necessary each individual who is provided a county vehicle will be classified appropriately to ensure that applicable benefits are taxed.”

Second District Commissioner Mike Schatz said, “I think we need to check into it a little bit further; obviously we want to make sure that everybody who’s affected by this is doing their part according to the tax code.”

One county employee may have actually paid taxes on county vehicle use when he did not have to since he may be exempt from the policy as a maintenance worker who is on call 24 hours, Schatz said. That employee may be eligible for a refund if he was taxed unfairly, Schatz added.

Vehicle Use Policy

The county’s vehicle-use policy states that Franklin County employees (with the exception of officeholders and authorized department heads) will not use a county-owned vehicle for a non-business purpose except for “de minims” personal use.

That is limited to meal and scheduled rest periods and exempt from IRS record-keeping requirements, the policy says.

“During overnight trips outside of the Union area, employees may drive county-owned vehicles to restaurants, or other limited personal use during non-working hours,” the policy states.

Moreover, the county’s vehicle policy states that “Only employees and other individuals directly involved in the conduct of Franklin County business will be permitted ridership in a county-owned vehicle.”

However, there is an exception that allows non-employees to ride in a county vehicle on out-of-town trips. But the non-employees must carry supplemental insurance.

The policy also addresses tax issues for county-owned vehicles. It says police and maintenance vehicles are exempt from taxation and record-keeping.

“All other drivers who are allowed to drive a county vehicle to or from their place of residence must maintain records documenting personal use of the vehicles,” the policy states.

Commuting to and from work is considered personal use, and the driver is responsible for keeping records, the policy states.

Under the policy, drivers must submit odometer readings and the number of personal miles driven to the county commission.

“The value of the personal miles will be considered taxable compensation to all employees subject to record-keeping requirements,” the policy says.