Newspaper article THE JOURNAL RECORD

Legislator Criticizes IRS, State Finance Office

Newspaper article THE JOURNAL RECORD

Legislator Criticizes IRS, State Finance Office

Article excerpt

A lawmaker who has questioned the treatment of University Hospitals employees during the changeover in operation to the Columbia/HCA hospital management firm aimed criticism Tuesday at the Internal Revenue Service and the Office of State Finance for determining that some of the employees' severance benefits are taxable.

"In my legislative career or private life, I have never seen a more arrogant, conniving, gutless and less accommodating government agency than the Internal Revenue Service," said Rep. Dan Webb, R- Oklahoma City, who is a certified public accountant. "And the Office of State Finance deserves a good tongue-lashing for caving in to the bureaucratic mentality of the IRS."

Abut 1,300 of the 2,175 employees decided to receive their severance benefits in cash. The basic severance package provided for longevity pay for 1997 plus 18 months of health care coverage or an equivalent amount in cash. The University Hospitals Authority also approved funding to pay employees for their accumulated sick leave and extended illness benefits, at one-half their hourly rate. Webb said that the finance office, based on its interpretation of IRS rules, determined that the insurance payment for these employees is taxable income. He said the two agencies stand by their opinion despite the fact that state employees have what is known as a "125 plan," a cafeteria-type plan that allows health insurance costs to be paid with pretax income. Webb asked the office of Sen. Don Nickles, R-Okla., to intercede for terminated employees and schedule a meeting with the workers, Webb and IRS representatives. …

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