Back taxes come back to haunt Hudson employees
YLJ FILE PHOTO/CARMEN MARIE FABIO
Former Town of Hudson Treasurer Sylvain Bernard (right, with then Mayor Michael Elliott) revealed the taxation discrepancies paid to full time town employees back in 2013.
While some Hudson residents thought they may have felt the last of the damage of former Director General Louise Léger-Villandré’s actions, approximately 50 current and former full-time employees received a four-page notice by registered mail at the beginning of the month indicating they still owe anywhere from hundreds to over $10,000 in taxation money to Revenu Québec.
“This is basically the reason that Louise resigned,” said one of the letter’s recipients, none of whom wish to be identified in this article. “The new accountant the town hired in 2013 (Sylvain Bernard) discovered benefits accrued to the staff from the health insurance plan should have been included in the T4 (taxation forms) as a taxable deduction.”
While the former DG claimed municipal employees were exempt from the taxation structure, Bernard’s research found otherwise resulting in the revelation that up to 10 years’ of benefits were not properly taxed. The town then hired a lawyer to deal with the federal and provincial governments to negotiate a deal and that’s where the situation had reportedly been left until recently.
“We don’t dispute the fact that we may, or may not, owe the taxes,” said the recipient. “But since the error was made by a town employee, for which they’re covered by an insurance policy, any penalty or interest, the town must accrue.”
Léger-Villandré pleaded guilty in December, 2015 to 19 charges of fraud in the misappropriation of $1.1 million in municipal funds over a 17-year period. Though fraud carries a maximum term of 14 years, she was sentenced to 30 months in jail after her age – 66 at the time – and cooperation with the investigation were taken into account.
Upon offering to resign when the initial error was discovered, Léger-Villandré asked then Mayor Michael Elliott for her severance package that would’ve amounted to a month’s salary for every year of work, reportedly in excess of $200,000.
“I said, ‘No, I’m going to take this up with council and I’ll let you know,’” Elliott told Your Local Journal. The severance amount was never paid out.
“It’s one last ‘thank you very much’ from Louise Villandré,” said another full time town employee who’s received a bill for $4820. “We’ve known about this since 2012,” he said. “It was corrected and we all started paying tax on our benefits. The town has done nothing since then and now we get a letter saying we have three weeks to rectify this.”
A former Hudson employee has taken on the role of trying to assemble information to allow the letter recipients to make informed decisions, “… as opposed to just reading the letter and doing what the letter says.” Though he confirmed he has discussed the situation with both a lawyer and an accountant, he declined to divulge anything further at this time.
Current Director General Jean-Pierre Roy said the amounts have been recalculated and new T4 and Relevé forms will be submitted to the employees this week. The amounts owed are exempt from the standard 20 per cent additional penalty.
When asked if it was possible employees didn’t know the benefits were taxable, Roy replied, “Who knew, who didn’t… we don’t know. There should have been a whistleblower at that time. There was not.”
Roy said the only intention now is to stabilize the situation and move on. “It’s another file we have to fix from the past.”
“I think we did as much as we possibly could,” said Mayor Ed Prévost of negotiating the period of nonpayment from 10 years down to three – 2009, 2010, and 2011.
“We went to bat for the employees but there’s nothing we could do about money they owed.” Prévost said the town’s lawyers had looked to protect both the interests of the town and the employees but insurance would not cover any misdeeds.
“There’s not much else we can do,” said Prévost. “The past keeps coming back to haunt us.”