BOSTON (CBS) – A secret take-home car perk might be coming to an end at the MBTA, but some of the employees who received the benefit might be getting a visit from the tax collector.
As the WBZ I-Team first reported, some managers have been driving new take-home vehicles owned by construction companies. Shortly after the I-Team started asking questions, all 23 vehicles were returned to the contractors.
The hidden program has possibly been going on for 30 years, agency leaders told the I-Team.
The cost of the vehicles was buried in multi-million dollar construction projects, making it almost impossible to know the full cost to taxpayers. Along with free use of the cars, the contractors also covered gas, insurance and maintenance.
Meantime, the MBTA also picked up the tab for the employees to park at a downtown garage with a monthly rate of $625.
Newton CPA Jeff Levine said those job perks should have been taxed as part of the employees’ compensation.
He noted that employees with the cars have titles like “director of document control” and “director of administration and finance,” indicating they might not spend a lot of time traveling to construction work sites. In that case, the majority of the vehicle use would be considered “personal” for the daily commute.
Like the secret unmarked cars, Levine said the tax requirement could have flown under the radar.
“It could be something that we consider negligence in the sense that they weren’t aware there was income that should be reported and since their employer wasn’t doing anything, it sort of got swept under the rug,” Levine told the I-Team.
While the majority of underreported taxable income examples could fall into that category, the accountant said there is the possibility of a more serious consequence.
“If they knew the car was being provided and they knew they should’ve been reporting the income, that’s fraud,” he explained. “And fraud has no statute of limitations. So these people could owe taxes for many years.”
A spokesman for the MBTA told the I-Team the agency’s tax advisers are working with the employees to “collect and pay any tax that is owed.”