Employees are held to a higher standard when it comes to being compliant with the filing and paying of taxes. This is a very true statement, there is no getting around it. A bargaining unit employee must be compliant with their federal tax obligations. There is a fine line that one must draw when determining the intent of an individual. This is very often a subjective matter. Understanding the system that makes these determinations is a crucial part of educating yourself and ensuring that you are being compliant with your tax obligations.
This issue is covered under Section 1203 (b)(8) “Willfully failing to file a tax return on or before its due date, unless it is due to reasonable cause. Willful failure to file any tax return required under the Internal Revenue Code of 1986 on or before the date prescribed therefore (including any extensions), unless such failure is due to reasonable cause and not to willful neglect.” Section 1203 (b)(9) covers “Willfully understating federal tax liability. Willful understatement of Federal tax liability, unless such understatement is due to reasonable cause and not to willful neglect.”
“Willful means the voluntary intentional violation of a known legal duty for which there is no reasonable cause.”
The Employee Tax Compliance Program sets out twice a year to identify potential non-compliance issues. It is very important that you respond immediately to any inquiry you may receive from ETC asking you to clarify a potential issue. Do not panic if you receive this kind of inquiry. This inquiry is meant to give you an opportunity to explain your situation. You have the right to consult with the Union during this process. It’s important to explain your situation completely and try to leave very little room for assumptions on the behalf of the deciding official. An employee is given the opportunity to correct any mistakes that may have been made on the tax return in question, or set up payment arrangements if necessary.
There are some things you need to be aware of when filing taxes. Not being able to pay is not a reason to not file your tax return. If you are due a refund, you are still required to file your return or file an extension by the due date of the return. It is your responsibility to check your return before submitting it to the IRS even if you go to a tax preparer. Having an outstanding debt that may offset your refund is not reasonable cause for failure to file your tax return or extension timely. Any time you are able to file/pay timely and you instead make a decision not to comply with your tax obligation this is considered “Willful”. It is better to file the return or extension timely and then take the opportunity to sort through whatever your compliance issues are.
The recommendation to either close the issue or to forward it to Labor Relations and Management is the next step in this process. You have the right to be notified of the decision. Management has an obligation to meet with you prior to proposing discipline, and you have a right to have Steward present at that meeting. Please keep in mind that NTEU73 is always available to help employees. If the issue you need assistance with is out of scope for the Union, we’ll get you the resources you need to resolve your problem.