DAVENPORT, Iowa—The Family Credit Union here is removing a city ID number from 13 accounts tied to firefighters in this city.
The city is investigating whether those accounts took advantage of a city ID number that could have been keeping them tax-free. According to a statement posted on the city’s website, Oct. 22, a Davenport spokesperson stated the that 13 private accounts initially set up by fire department personnel at the $141-million Family CU wrongly used the city’s taxpayer identification number. That number is used by the IRS and could keep them exempt from income or sales tax.
The website statement stated, “When requested, the Family Credit Union could not produce any authorized signature for the addition of the City’s FEIN to the account, which was originally established at the Davenport Fire Department Credit Union in 2000 with a DFD employee’s social security number. In 2008, the Davenport Fire Department Credit Union closed and accounts were transferred to the Family Credit Union.”
WQAD 8 reported that it has obtained a letter sent out from the city’s finance director to the fire department on Tuesday, October 21. In the letter, the finance director said that any account using the city’s ID were doing so without his authorization, violating the city’s policy.
The city’s finance department’s looking into whether the use of that ID was simply an error or intentional. One of those accounts was called the DFD Clothing Account, a way for firefighters to pool personal funds or use their $700,000 annual allowance for uniforms. It’s typical for firefighters to pool resources for things like uniforms and food, but to do so via a tax-free account is illegal.