Q. If a teacher takes a new job with a different school district in the same state, could the teacher be considered to be still employed by the same employer?
A. Yes, based on the language in the listing of required modifications (LRMs), that would appear to be the current IRS position. However, NTSA has engaged in discussions with the IRS with the goal that severance occurs when the teacher leaves one district to teach in another district in the same state since the district hires, fires and sets working conditions. We argue that the state does NOT do that.
The NTSA Government Affairs Committee has discussed this issue with the IRS (following queries from our members) and is hopeful that we will receive additional clarity that the IRS is not going to treat (in audits) severance of employment in the way outlined in the LRMs. It is our hope that severance of employment will be triggered when the employee leaves one school district to teach in a second district (as has been the practice in the past), even in the same state. Stay tuned!