CHARLESTON – The West Virginia Supreme Court of Appeals has paid the Internal Revenue Service more than $200,000 as a result from an audit done over the course of the last year.
“The Supreme Court of Appeals remains committed to transparency and accountability and to regaining the trust of West Virginia taxpayers,” a Supreme Court news release stated. “Recently, requests have been made for documents relating to a federal employment tax audit of the court conducted by the Internal Revenue Service in recent months.”
The news release said that the court believed the documents were confidential and exempt from disclosure to the public under the Freedom of Information Act because they contained personal tax information regarding individual employees of the court and those employees are entitled to their privacy.
“However, in the interest of transparency, the court makes this statement and discloses documents relating to the IRS audit,” the news release stated. “It should be emphasized that none of the employees listed in the proposed notice of adjustment documents committed any wrongdoing and none of the employees listed are justices.”
The court and the IRS reached a resolution on eight categories and the court paid the IRS $227,541, which was calculated based on tax withholding the court should have made, according to the release.
The audit began in April 2017 and was for the tax year of 2015. The audit covered tax years from 2014 until March 31 of this year.
A reporter for West Virginia MetroNews filed a Freedom of Information Act requesting the tax documents, which were later released.
The resolution closed the audit and resolved the federal tax matters.
“The court welcomed the opportunity to meet its obligations under federal tax law and regrets the errors made,” the release states. “We are fully committed to compliance with our federal tax obligations in the future.”
The eight categories of federal tax payment adjustments that the court needed to make included seven categories related to workers classified as independent contractors who should have been treated as employees for tax purposes.
The eighth category related to per diem payments that should have been treated as taxable to the employees who received them.
During the 2018 Legislative session, the Legislature passed a resolution to have greater legislative oversight for the court system’s budget.
The Judicial Budget Oversight Amendment will have to be approved by voters in the November election before going into effect.
The oversight resolution was brought about after it came to light about the cost of renovations at the Supreme Court. More than $3.7 million has been spent renovating the justices’ offices, including a couch for Chief Justice Allen Loughry’s office that cost approximately $32,000.
In January, Brian Casto, counsel for the Joint Standing Committee on the Judiciary, pointed out that West Virginia is the only state where the judiciary enjoys the sort of budget autonomy like this.
Essentially, the separation of powers in West Virginia has been interpreted to mean the court system provides its budget and the Legislature may increase it but cannot decrease it.
