11.21.06

Schumer Calls On IRS To Refund Over $500,000 To Nassau County And Its Employees

Schumer Credits Nassau Comptroller Weitzman for Identifying Problem

Today U.S. Senator Charles E. Schumer called on the Internal Revenue Service to release approximately $520,000 in FICA reimbursements owed to Nassau County and some of its employees for the years 19961999. The IRS has failed to release the money for a decade due to a dispute over a small portion of the refund and Schumer said today that its well past time to make the payment.

The IRS must speed up the longdelayed refunds of more than half a million dollars to Nassau County and some of its employees for overpayment of FICA tax, Senator Schumer said.

The overpayments occurred when employee sick leave, which is subject to the FICA tax, was retroactively converted to workers compensation, which is not, resulting in a claim for reimbursement of FICA taxes. The federal government normally refunds the FICA tax paid under such circumstances, but due to a bureaucratic snafu, the funds have languished in the IRS.

There is no good reason to further delay these refund payments, Schumer said.

This problem was identified and brought to my attention by Nassau County Comptroller Howard Weitzman, and I commend him for his efforts to correct it, Schumer said. Comptroller Weitzman had submitted the paperwork to secure the refunds and followed up with phone calls and emails to the IRS, Schumer said, but all to no avail.

Comptroller Weitzman said, In Nassau County, we are committed to efficient local government and maximizing all available revenue sources to reduce the burden on taxpayers. When our talks with the IRS had reached an impasse, I notified Senator Schumer. We are very grateful to Senator Schumer for his intervention with the IRS to restore these funds to the county and its employees.

Senator Schumer today forwarded a letter to IRS Commissioner Mark Everson requesting his assistance in rectifying the problem. Nassau Countys unpaid FICA reimbursement claims for the period 1996 through 1999 were filed as early as 1998, the letter states. The federal government owes the County $344,646 plus interest for those years, in addition to the $176,236 owed to County employees for their share of the overpayments during those same years.

The IRS has previously refused to release the entire refund claiming it would contradict a policy against paying claims for FICA payments made during the first six months of a uniformed officers leave pursuant to section 207(c) for the years 1996 and 1997. Following the Countys appeal of that decision, the IRS refused to release any payments to the County for the entire fouryear period, 1996 through 1999.

Last week, however, the IRS appeared to reverse that policy when it refunded FICA payments made by New York City for the first six months of a uniformed officers leave pursuant to section 207(c). Given that precedent, Schumer wrote, the IRS should also approve Nassau Countys claims for reimbursement and immediately issue a refund to the County for the years 1996 through 1999, with interest. I am greatly concerned that the federal government is retaining money that has been owed to the taxpayers of Nassau County for an entire decade, Schumer wrote. I am therefore turning to you for assistance in resolving this impasse which is surely bureaucratic and not because of any significant policy or legal dispute. I would appreciate your assistance in helping to finally secure this significant refund for my Nassau County constituents.



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