April 2, 1980
Subject:
Taxation; Highway Patrol Voluntary Pledge Fund; G.S. 105-154; G.S. 105-258; General Statutes Chapter 126, Article 7.
Requested By:
Burley B. Mitchell, Jr., Secretary Department of Crime Control and Public Safety
Question:
Must the Highway Patrol Voluntary Pledge Fund report to the Department of Revenue information concerning distributions from the fund or is such information confidential under Article 7 of Chapter 126 of the General Statutes?
Conclusion:
The information is not confidential and must be reported to the Department of Revenue.
The Highway Patrol Voluntary Pledge Fund is an organization created for the purpose of making a monetary award to each of its members who leave the Highway Patrol by reason of death, retirement, or disability. This purpose is accomplished by collecting a small assessment from each of the remaining members whenever such an award is to be made. Only highway patrolmen are eligible for membership, but not all patrolmen are members, affiliation with the Fund being strictly voluntary and not a condition of employment. The Fund is an association of individual patrolmen and not an official organization of the North Carolina Highway Patrol.
Inasmuch as distributions from the Fund may be taxable to the patrolmen and beneficiaries who receive them, a question arises as to whether the Fund is subject to the reporting requirements of
G.S. 105-154:
"Every individual, partnership, corporation, joint-stock company or association, or insurance company . . . having the control, receipt, custody, disposal, or payment of interest (other than interest coupons payable to bearer), rent, salaries, wages, dividends, premiums, annuities, compensations, remunerations, emoluments or other fixed or determinable annual or periodical gains, profits, and incomes paid or payable during any year to any taxpayer, shall make complete return thereof to the Secretary of Revenue."
Clearly, the Fund is an association and its distributions are of the type described in G.S. 105-154. It has been suggested, however, that the Fund is precluded from making the required report to the Secretary of Revenue by G.S. 126-24(5), which provides that personnel file information may not be examined by state government officials or purposes of a tax investigation. G.S. 126-22 defines personnel file information to include "any information gathered by a department, division, bureau, commission, or other agency subject to Article 7 of this Chapter which employs an individual (or) previously employed an individual." Since the Voluntary Pledge Fund is neither an employer nor a department, division, commission, or other agency, it would appear that its records relating to distributions would not constitute confidential personnel file information within the meaning of G.S. 126-22 and, further, that the Fund is required by G.S. 105-154 to report such information to the Secretary of Revenue. Additionally, such records are subject to inspection under G.S. 105-258, which authorizes "(the) Secretary of Revenue, for the purpose of ascertaining the correctness of any return, making a return where none has been made, or determining the liability of any person for any tax imposed by this Subchapter or collecting any such tax . . . to examine, personally, or by any agent designated by him, any books, paper, records, or other data which may be relevant or material to such inquiry.
Rufus L. Edmisten Attorney General
Marilyn R. Rich Assistant Attorney General