News
OU Trustees Will Cover McDavis’ Income Taxes
By: Steve Robb - Athens Messenger staff reporter
Posted on:
Ohio University has agreed that going forward it will cover the tax liability the IRS is saying OU President Roderick McDavis faces because he resides in on-campus housing, but the university is apparently still working with the IRS to resolve the question of back taxes.
As The Athens Messenger reported last month, the OU Trustees amended McDavis' employment contract to indemnify McDavis for the cost of tax liability that might result from the requirement that he live on the Athens campus at 29 Park Place. The amendment also covers potential tax liability from a term life insurance policy provided by the university.
According to the university, during the course of an ongoing audit the IRS determined that a portion of the housing benefit is to be treated as a taxable benefit at Ohio University.
The action by the trustees was retroactive to Jan. 1 of this year.
However, the IRS audit that OU officials say brought the matter to their attention, and which is still in progress, covers 2011 and 2012, a trustees' resolution states.
The IRS has indicated the tax liability for 2013 for the residence is about $19,000, and for the life insurance it is about $11,000, according to a statement issued by OU. The estimated $30,000 owed for 2013 is for federal, state and local income taxes and Medicare.
Last month the trustees also authorized Vice President of Finance and Administration Steve Golding to negotiate and resolve any issues arising from the audit and to report to the trustees the nature and cost of the settlement agreement.
According to the statement issued by OU, it is expected that when that agreement is concluded, McDavis will be held harmless for the tax liability retroactively.
OU spokeswoman Jennifer Krisch said it is not known when the audit will be completed.
According to OU, the requirement that McDavis reside at 29 Park Place was in his original contract when he was hired, and at the time it was thought to be a non-taxable benefit under IRS regulations. The OU statement calls IRS interpretations on the matter "somewhat ambiguous and continuously evolving," as evidenced by the fact that some universities treat on-campus presidential housing as exempt from taxable income under the IRS code and others do not.