We have compiled the most common questions asked by our clients in order to provide you with a source for quick answers. We are happy to answer any question not included in this section.
Have a question that is not answered here? Contact our client services department to find an answer.
What tax exempt IRS code section does our local government fall under?
Answer: Governments are often requested to provide their tax exempt number or a “determination letter” to support their tax exempt status, most often in connection with grant applications, issuance of capital lease obligations, or tax exemption for sales tax by vendors. Governments use their employer identification number (EIN) for identification purposes. This will generally suffice, however a “government affirmation letter” may be obtained from the IRS free of charge by calling 1-877-829-5500. Although it will generally not be necessary, a “determination letter” may be obtained from the IRS for a fee confirming its status as a political subdivision, instrumentality of government, or whether revenue is exempt under Internal Revenue Code 115. More information can be found at http://www.irs.gov/govt/fslg/article/0,,id=112708,00.html
Should our government have a fraud policy?
Answer: Most people in the financial community believe it is a good idea. Given that the policy is fairly simplistic (in most cases about two pages) it is generally very easy to do and will help your organization address some issues before a problem arise. A sample fraud policy issued by the AICPA can be found in the documents section of this website at http://www.aicpa.org/
Are elected officials considered employees by the IRS and should they be issued a W-2?
Answer: According to the IRS, generally, any individual who serves as a public officer is an employee or the government for whom he or she serves. Therefore, the government entity is responsible for withholding and paying Federal income tax, social security and Medicare taxes, and issues a Form W-2, Wage and Tax Statement , to the public official. More information can be found on who is considered to be a public official at http://www.irs.gov/govt/fslg/article/0,,id=110343,00.html