FAIRBANKS — The Internal Revenue Service has put an end to an arrangement in which Fairbanks paid a local man to maintain a city cemetery.
The Fairbanks Daily News-Miner says the IRS conducted an independent audit of the city’s vendors and found Frank Turney does not meet the criteria for being an independent contractor.
The IRS determined that the city had behavioral control over Turney and therefore he is an employee. As such, he would have to join a union as a temporary employee — something Turney says he won’t do.
The Clay Street Cemetery was established in 1903 and is on the National Register of Historic Places. Maintenance of the cemetery will now be done by the city’s Department of Public Works.
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In my experience, the IRS rarely does a random audit to confirm the relationship of a subcontractor is correct and not actually an employee, especially random audits of government operations.
Someone likely requested this audit and if that person was a union member or political opponent of Frank Turney, then this may be abuse of the IRS powers.
In any case, the reasonable reaction for Fairbanks is simply remove the "behavioral control" over this subcontractor who has been performing this work satisfactorily for years. He can get back to work and Fairbanks will save a considerable sum.
If a business was found violating this IRS rule, they would very likely have to pay back taxes, penalties and interest for the years of subcontracting improperly. Will Fairbanks have to pay?
By the way, even if Turney did join the union, he may not get this job because he would be "new", so last in line.