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Associated Press

UND faces a possible $1.57 million tax bill in a squabble with the Internal Revenue Service over Social Security payments.

Most of the dispute involves the lack of Social Security tax withholding from medical university's School of Medicine. Smaller sums are at stake over the tax treatment of early retirement buyouts and fringe benefits.

The potential bill, which includes the years 1991 through 1994, would grow larger if the IRS tacks on interest and penalty charges, said Lyle Beiswenger, UND vice president for finance.

The $1.57 million is by far the largest potential tax liability listed in a comprehensive audit of North Dakota's university system, which includes 11 public colleges.

One of the disputes centers around medical residents. Residents are medical doctors who have their medical degrees and are working toward board certification, a process that usually takes three to five years. Randy Eken, the medical schools associate dean of administration and finance, said Social Security taxes are not withheld from resident's paychecks. "UND considers the residents to be graduate students -- who are exempt from Social Security withholding -- instead of employees," Eken said Thursday. The medical school, which operates a network of clinics, has about 110 residents.

North Dakota State University is involved in its own argument with the IRS, the audit says. The university paid $323,918 two years ago to settle an assortment of tax disputes from 1991 to 1994.


Reference: July 11, 1997,  Grand Forks Herald and Associated Press

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