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L . -1. <br />MEMO TO: MAYOF AND CITY COUUNNCIL <br />FROM: CLERK-ADMINISTRAT�`��� J <br />DATE: JANUARY 13, 1989 <br />SUBJECT: INTERNIL REEITNUE CODE SECTION 89 <br />As I indicated to you in a recent Administrative Newsletter <br />the Finance Director and I have been gathering information <br />and discussing with consultants the requirements of Section <br />89 of the Internal Revenue Code created by the 1986 Tax <br />Reform Act. Something that has become clear as a result of <br />our reading and discussions with consultants is that, <br />Until the IRS promulgates the rules regarding <br />Section 39 there is a broad range of opinion as <br />to the methods to be practicing in complying with <br />its requirements, the Law is very complicated and <br />confusing. In fact, the Tax Reform Act comprised <br />over 400 pages at the time it was signed into Law by <br />President Reagan, and the cost to the City's <br />employees for our not complying with the require- <br />ments of Section 89 are extremely onerous. <br />Attached to this memorandum please find an alert from Arthur <br />Young, a consulting firm specializing in personnel matters, <br />outlining the basic requirements of Section 89. Rather than <br />attempting to summarize the Law, I felt it was easier to <br />provide you with this flyer which gives you a taste of the <br />requirements of this legislation. <br />Doi, 2rager and I are still reviewing the information we have <br />received with respect to Section 89 and will be meeting <br />shortly with our City auditors to gain a fuller <br />understanding of what their advice is with regard to our <br />complying with the Law. At that time, you will be receiving <br />a report from us recommending specific actions and if <br />d^termined appropriate, the hiring of a consulting firm to <br />assist us in fulfilling the compliance test requirements. <br />DFP/MJS <br />Attachment: <br />NO <br />