IRS Fines Orange Schools $8,500 for Failing to Send Proper Forms
The Orange Unified School District had to pay the Internal Revenue Service $8,500 in fines after an audit revealed that the business office failed to send proper tax statements to consultants for several years.
The item was on a list of bills the school board needed to approve at Thursday night’s meeting. Trustee Robert H. Viviano asked school officials to explain the need for the check to the IRS.
In the past, the district has not sent a particular form to consultants, acting Assistant Supt. Harvey M. Grimshaw said.
“It was assumed before that if someone said he was an independent contractor or a business person that he did not require a 1099 (form),” he explained.
The district learned otherwise after the IRS audited records with regard to independent contractors for 1990-92. Grimshaw noted that other school districts have been under the same scrutiny and that the audit was part of a “growing awareness” of the need to send the tax statements to contractors.
The district sent out 40 of the 1099 statements last year and 400 of them this year, Grimshaw said. “We are now in the process of cleaning up the situation,” he added.
Grimshaw said he was uncertain about 1993 statements, but that he did not believe the district would have further liability.
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