The CFTOD Says Employees Owe $2 Million in Back Taxes on Disney Benefits
The Central Florida Tourism Oversight District (CFTOD) has informed employees that they owe more than $2 billion in back taxes to the IRS.
The issue stems from the complimentary Walt Disney World Annual Passes that employees and retirees received as part of their benefits under the former Reedy Creek Improvement District.
In an internal memo obtained by the Orlando Sentinel, district administrator Glen Gilzean explained the tax situation to employees.
“[I]t has come to the attention of the district administration that the previous leadership chose not to inform staff about their IRS obligations to pay legally owed taxes on season pass benefits,” Gilzean wrote. “This has resulted in our employees owing over $2 million in income back taxes.”
The CFTOD Will Cover The Back Taxes For Employees
The CFTOD says it is working to resolve the issue by covering the back taxes owed by employees and retirees, but they are awaiting a response from the IRS.
“It was a top priority of our leadership team to ensure that our employees are not penalized for previous failures,” he said.
According to district spokesman Matthew Oberly, the district employees have informed leadership that they were unaware of the tax liability.
“CFTOD team members have communicated they appreciate the administration’s willingness to absorb a significant financial burden that accumulated over the past several years,” he said.
Disney Benefits Are Once Again in The Spotlight
The Disney-related perks have been a point of contention between the CFTOD and its employees. Under the previous management, employees and retirees received Disney-related benefits, including Annual Passes to Walt Disney World.
Upon taking control of the district, the CFTOD replaced the Disney benefits with a $3,000 yearly stipend. It was a move that angered many formally loyal CFTOD employees.
Federal law prohibits the IRS from confirming or denying any correspondence in tax-related matters. Disney, meanwhile, has refused to comment.
Employees Could Face Tax Problems
According to Charolette A. Erdmann, the founding attorney of Orlando Tax Law, both the CFTOD and its employees could face tax implications if taxes were never paid on the Disney benefits.
“The Disney passes were likely a taxable benefit, similar to wages or bonuses,” said Erdmann, who is not affiliated with the district and has not reviewed the matter in its entirety. “Due to the nature of the benefit, they were unlike cafeteria plans, medical benefits and other pre-tax benefits. They are also of substantial value.”
Gilzean, for his part, reiterated to employees that he is working to solve the tax issue.
“I understand the stress that outstanding tax issues with the IRS can cause for our team,” Gilzean wrote. “Please be assured that we are diligently working to resolve this matter as soon as possible.”
As always, continue to check back with MickeyBlog. We will update you on all news coming out of the former Reedy Creek Improvement District.