The lump-sum payments made to 37 members of the Schneider administration for unused leave are subject to both income and Social Security tax.
A source at the V.I. Internal Revenue Bureau declined Sunday to comment on the legality of the payments made during the so-called "midnight raid on the treasury." But she did say the payments clearly were taxable income on which the recipients would have to pay income tax.
Because of the manner in which the payments were made — using miscellaneous disbursement vouchers — the recipients also would have to pay both ends of Social Security, the employer's contribution as well as the employee's, or 15.3 percent of the total sum they received, she said.
The lump-sum payments were made for unused annual and other leave as Gov. Roy L. Schneider was leaving office.
Gov. Charles W. Turnbull said last week, in his release identifying the officials who got the $383,000 worth of payments and the individual amounts — that he had turned the matter over to the Inspector General's Office for investigation. He did not specify whether that was the local or federal inspector general.
Editor's note: See earlier news story for the list of recipients, and a related editorial under Commentary/Editorials.
