Florida Gulf Coast University will pay almost $87,000 in back taxes after an audit by the Internal Revenue Service.
The IRS audit found the university labeled about 55 people as independent contractors rather than employees. This meant the university did not pay Social Security and Medicare taxes for them.
The school’s Vice President for Administrative Services and Finance Steve Magiera said drawing the line between an independent contractor and an employee is tricky.
“We have some students here at the university that play in our graduation ceremony,” he said. “Now, this is a 50 dollar payment. We had one or two graduations at that time so you’re talking about less than $100 on some individuals and they’re saying that, ‘No. Those need to be employees.’”
The IRS told the university any job with a structured schedule counts as an employee. This includes professors who teach classes for only a few weeks at a time.
It said an independent contractor is someone who works on their own time and offers services that are uncommon to the university.
The IRS waived all penalties and interest. Magiera said FGCU will pay the back taxes over a four year period.
