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GGD-92-20R 1 (1992-06-17)

handle is hein.gao/gaobackbt0001 and id is 1 raw text is: GAO United States Generl Accounting Office Washington. D.C. 20548 Generzl Government Division 92-1564 June 17, 1992lii11 HDI The Honorable John H. Glenn 146893 Chairman Committee on Governmental Affairs United States Senate Dear Mr. Chairman: This letter responds to your inquiry regarding the practicality of the United States Postal Service (USPS) extending its withholding of employee local government taxes to a greater number of U.S. local governments. Based on our review of this matter and our discussions with USPS officials, we believe extending withholding to a greater number of U.S. counties and townships would be burdensome to USPS in terms of increased administrative and payroll software reprogramming costs. As you know, Public Law 93-340 requires that a city or county must have within its political boundaries 500 or more federal employees before it can be eligible for local tax withholding by the federal government. Under the law, USPS currently withholds local taxes from its employees' paychecks in 54 cities, counties, and towns. If the law's threshold requirement were lowered to 25 or more federal employees per location, USPS estimates that potentially over 2,900 additional local governments could be eligible for withholding. Postal Service officials calculate this could involve withholding local taxes from an additional 415,000 USPS employees. USPS officials believe that lowering the eligibility threshold, given the scale of USPS' operations--740,000 employees and 29,000 post offices--would be burdensome. Specifically, they said that the following current challenges to correctly withhold local taxes would be exacerbated if the threshold were lowered: The diversity and complexity of local government taxing formulas require software modifications to USPS' automated payroll system every time a local GAO/GGD-92-20R, USPS Local Tax Withholding

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