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Buffalo Public Schools settle with NYS for $1.2M in unpaid income taxes

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Buffalo Public Schools have settled with New York State for just under $1.2 million in previously unreported income taxes for district employees.

At the end of Wednesday evening, Buffalo School Board members went into executive session to approve the settlement. General Counsel Nathaniel Kuzma told WBFO it stems from a district audit by the Internal Revenue Service for the 2014-2016 calendar years.

That was settled last October for $7.5 million. This newest payment settles the case for state income taxes.

"The audit had to do with a number of issues," Kuzma said. "One, it was cosmetic surgery being a taxable benefit. All the money that is paid to the engineers being taxable as wages. You know, they would get salary and then they would get money to act as independent contractors, and then the third and fourth issues were the parent facilitators being employees of the district and we had to settle those taxes, as well as the Title I teachers."

Kuzma said this fully completes the district's obligation for this audit and for the employees. He said the taxation departments "went after" city schools instead of each employee individually. He said the money paying the settlement was already put aside in last year's school budget.

Kuzma said the district has changed the way it accounts for the pay of parent facilitators and Title I teachers and will be negotiating with school engineers at the end of this month to resolve their income tax issue.