Travel Expense Reimbursements. Presented by: Paula Graham, Wally Reimold, & Lori Stieber

Similar documents
Taxable Fringe Benefit Guide FEDERAL, STATE, AND LOCAL GOVERNMENTS THE INTERNAL REVENUE SERVICE

Taxable Fringe Benefit Guide

Taxable Fringe Benefit Guide FEDERAL, STATE, AND LOCAL GOVERNMENTS THE INTERNAL REVENUE SERVICE

IRS One Day Seminar. September 6 th Travel

Chief Counsel Advice Memorandum

Revenue Ruling Trade or Business Expenses

Taxation of Fringe Benefits Jeffrey A. Schneider, EA, CTRS, NTPIF SFS Tax & Accounting Services SFS Tax Problem Solutions S US Highway 1 Suite

FEDERAL STATE AND LOCAL GOVERNMENTS TAX EXEMPT/ GOVERNMENT ENTITIES: FSLG Mission: FRINGE BENEFITS

STATE OF COLORADO FISCAL RULES

Special Tax Rules Applicable to State Legislators

SUMMARY: This document contains proposed regulations relating to the deductibility

Chief Counsel Advice Memoranda

Private Letter Ruling

Preparing for an Internal Revenue Service Review for a Housing Authority

Payments on Behalf of or Reimbursements Made to Employees Under an Accountable Plan

IRS Rulings & Other Documents (2001-Earlier), Traveling expenses., Revenue Ruling , CB 75, Internal Revenue Service, (Jan.

Re: Recommendations for Priority Guidance Plan (Notice )

Travel, Entertainment and Auto Tax Rules

MEMORANDUM. Background

T.C. Summary Opinion UNITED STATES TAX COURT

PERSONNEL POLICIES AND PROCEDURES Personnel Policy Adopted by Res.:

Tax Treatment of Travel Expenses

26 CFR : Examination of returns and claims for refund, credit, or abatement; determination of correct tax liability. (Also Part 1, 280A, 1031).

Expense Type Breakdown

TRAVEL POLICY AND PROCEDURES MANUAL

Travel Policy and Procedures Manual

CF:60:C:002.2 TRAVEL POLICY

Whether an account receivable established by an election to apply Rev. Proc constitutes related party indebtedness under I.R.C. 965(b)(3).

CITY OF ATLANTA OFFICE OF CITY INTERNAL AUDITOR 68 MITCHELL STREET SW, SUITE ATLANTA, GEORGIA (404) FAX: (404)

EMPLOYEE VS CONTRACTOR

Building for the Future

Persons Not Eligible for the Standard Deduction

Provo City School District Policy Series 6000 Finances and Operations 6410 P1

DINWIDDIE COUNTY DIVISION OF FINANCE & GENERAL SERVICES POLICIES AND PROCEDURES TAXABLE FRINGE BENEFITS. Adopted March 1, 2015, Revised March 18, 2015

SANTA BARBARA COUNTY EMPLOYEES RETIREMENT SYSTEM TRUSTEE TRAVEL POLICY I. PURPOSE

THE 201 TRAVEL NURSE TAX ORGANIZER

LIVINGSTON COUNTY COUNTY BUSINESS EXPENSE REIMBURSEMENT POLICY

Travel Expense Reimbursement

Revised. April Travel Policy

P-Card Procedures PURCHASES

PLATTE CANYON WATER & SANITATION DISTRICT EXPENSE REIMBURSEMENT POLICY

ALI-ABA Course of Study Advanced Estate Planning Techniques March 24-25, 2011 San Francisco, California

WILL COUNTY, ILLINOIS BUSINESS/TRAVEL REIMBURSEMENT REGULATIONS

CITY OF TUMWATER POLICY MANUAL - PART 2: OPERATING POLICIES SECTION 1 TRAVEL EXPENDITURE AND REIMBURSEMENT APPROVALS

FSLG Fringe Benefit Guide FEDERAL, STATE, AND LOCAL GOVERNMENTS THE INTERNAL REVENUE SERVICE

TRAVEL AND ENTERTAINMENT POLICY OF THE ARIZONA COMMERCE AUTHORITY

Accountable Plans as per the IRS Code Section 62(c) and IRS Regulation

TRAVEL AUTHORIZATION AND EXPENSE REIMBURSEMENT. A. In State Travel Prior Activity Form to Use Authorization

TAX PLANNING FOR THE DISPOSITION OF PARTNERSHIP INTERESTS S

General Policy - Reimbursement of Expenses for Travel

COWLEY COUNTY, KANSAS Meals and Travel Policy Effective August 1, 2014

Instructions for Form 2106

Information Paper: Taxability of Domicile to Duty Benefits for CY 2015

T. TRAVEL REGULATIONS

CITY OF LAWRENCE, KS TRAVEL POLICY

Revenue Rulings and Other Publications: 1963

Document Display Page 1 of 1

Livingston County Trial Courts 204 S. HIGHLANDER WAY, HOWELL, MI COURT BUSINESS EXPENSE REIMBURSEMENT POLICY

ALI-ABA Course of Study Consolidated Tax Return Regulations. Cosponsored by the ABA Section of Taxation. September 22-23, 2005 Washington, D.C.

Staff Expense Reimbursement

Tax Matters Partner: Power & Responsibility Partnership Committee American Bar Association, Tax Section January 21, 2011

INTERNAL REVENUE SERVICE NATIONAL OFFICE TECHNICAL ADVICE MEMORANDUM

Internal Revenue Service, Treasury

Instructions for Form 2106

Board Member Expense Policy and Procedures

STATE OF ALABAMA Department of Finance Office of the State Comptroller

2018 Virginia Legislators Tax Guide

26 CFR : Reimbursements and other expense allowance arrangements. (Also Part I, 62.) Rev. Proc

Income Tax Consequences of the Tax Cuts and Jobs Act

Reedsinith. 4 sj & I. To: FCERA Board of Retirement. Subject:

This regulation explains and governs the reimbursement ofexpenses incurred by employees of Prince William County Public Schools (PWCPS).

Chapter 8. Deductions: Employee and Self-Employed-Related Expenses. Eugene Willis, William H. Hoffman, Jr., David M. Maloney and William A.

CAR 8-2 TRAVEL and BUSINESS RELATED EXPENSES CAR 8-2

ConocoPhillips. Domestic Temporary Assignment Policy. For questions regarding this policy you may contact: The Relocation Center at

PRIVATE RULING atty fees to class counsel.txt PRIVATE RULING PRIVATE RULING

3Q: Do I get a deduction if I donated my time to volunteer for an organization/church?

Adopted: MSBA/MASA Model Policy 412 Orig Revised: February 17, 2011 Rev. 2008

Hot Topics in Partnership Taxation

General Tax Tips. Self-Employment Overview:

EXPAT TAX HANDBOOK. Tax Considerations For Remote Workers Living Abroad

TABLE OF CONTENTS. Overview Who Qualifies for Special Tax Treatment as a Minister Income to Be Reported The Parsonage Allowance...

INCOME TAX DEDUCTIONS FOR CHARITABLE BEQUESTS OF IRD

Chapter 5 p.389 Mixed Business/Personal

CHAPTER 3 Business Income & Expenses: Part I

NOACSC Tax Hot Topics. September 21, 2018 Christopher E. Axene, CPA

ALI-ABA Course of Study Consolidated Tax Return Regulations. Cosponsored by the ABA Section of Taxation. October 5-6, 2006 Washington, D.C.

Federal Taxation Curriculum

Copyright 2009 Vern Hoven Tax Seminars. US Youth Soccer Federal Tax Update for Non Profit Entities. Vern Hoven, CPA w/ Masters in Tax

UNIVERSITY OF FLORIDA GRADUATE TAX PROGRAM

Coast Community College District ADMINISTRATIVE PROCEDURE Chapter 7 Human Resources

HORRY COUNTY TRAVEL POLICY AND PROCEDURES MANUAL

CHAPTER 14 FINANCIAL RESPONSIBILITIES

MADERA COUNTY ADMINISTRATION

for Firefighters Occupational Series

U.S. DOMESTIC TEMPORARY ASSIGNMENT ASSISTANCE PLAN

TRAVEL POLICY AND EXPENSE REPORTING BOARD OF DIRECTORS POLICY AND PROCEDURE NUMBER 032

IRS EMPLOYMENT TAX ISSUES

BUSINESS POLICY AND PROCEDURE MANUAL

WHEREAS, The Board of Directors has been engaged in a comprehensive review of its governance policies; and

Mary J. Thee, Human Resources Director/Asst. County Administrator

Transcription:

07 19 11 Travel Expense Reimbursements Presented by: Paula Graham, Wally Reimold, & Lori Stieber

Key Concepts to Determine if Excludable: Tax home The definition of away from home (overnight/sleep or rest rules) Temporary vs. indefinite travel assignments Substantiation: Accountable Plan Rules Reimbursements for travel expenses -IRC 162(a)(2) 2

Travel Expense Reimbursements include: Costs to travel to and from the business destination Transportation costs while at the business destination Lodging, meals and incidental expenses Cleaning, laundry and other miscellaneous expenses 3

TAX HOME: One Regular or Main Place More Than One Regular or Main Place No Regular or Principal Place -Rev. Rul. 73-529; -Rev. Rul. 93-86 4

Tax Home: Regular Place of Business Includes general vicinity or area In most cases, employer s office is tax home 5

Tax Home: IF More Than One Regular or Main Place of Business Determine at each location : Time worked Degree of business activity, and Income earned 6

Tax Home: No Regular or Principal Place of Business Personal Residence -Rev. Rul. 73-529; Rev. Rul. 93-86 7

Tax Home: Legislators may elect tax home -IRC 162(h)(1)(B); TD 9481; TAM 9127009; Prop Reg 1.162-24 8

Away From Tax Home Employee must stay overnight or Travel longer than an ordinary workday and stop for substantial sleep or rest 9

Sleep or Rest Rule Court Cases Define Sleep or Rest : No set distance or hours traveled Sleeping or resting in car doesn t qualify Usually applies to transportation workers --U.S. v Correll, 389 U.S. 299,302-303 (1967); Rev. Rul. 75-170; Rev. Rul. 75-432 10

Sleep/Rest Test Not Met - Taxable U.S. v Correll, 389 U.S. 299, 302-303(1967) Barry v. Commissioner, 27 AFTR 2d 71-334, 435 F2d 1290(CA1 1970) Coombs v. Commissioner, 608 F2d 1269, 1276(1979) Fife v. Commissioner, 73 T.C. 621(1980) Rev. Rul. 68-663, 1968-2 C.B. 71 Matteson v. Commissioner, T.C. Memo 1974-96 Unger v. Commissioner, T.C. Memo 1986-64, 51 TCM 455 11

Sleep/Rest Test Met Not Taxable 12 Williams v. Patterson, 286 F.2d 333 (5th Cir. 1961) Rev. Rul. 75-170, 1975-1 CB 60 Anderson, David, (1952) 18 TC 649 Weaver, Don, (1953) PH TCM 54001, 12 CCH TCM 1421 Rev. Rul. 75-168, 1975-1 CB 58 Johnson, Mose, (1982) TC Memo 1982-2 Rev. Rul. 75-432, 1975-2 CB 60 Siragusa v. Commissioner, T.C. Memo 1980-68

TEMPORARY VS. INDEFINITE ASSIGNMENTS Temporary Assignments - Non-Taxable = Less Than 1 Year Indefinite Assignments - Taxable = Longer than 1 year: Rev. Rul. 93-86; Rev. Rul. 99-7 13

Temporary vs. Indefinite Assignments Temporary or Indefinite? Employer must make decision on length of assignment when the assignment begins 14

Temporary Assignment: Duration At Single Location Expected to Last and Actually Lasts Less than 1 Year 15

Indefinite Assignment: Duration at Single Location: Expected to last longer than 1 Year Actually Lasts longer than 1 Year 16

SUBSTANTIATION: ACCOUNTABLE PLAN RULES: Business connection Documentation and Timely return of excess reimbursements. 17

Accountable Plan An accountable plan may include a per diem allowance method. Rev. Proc.2005-67; Reg. 1.274-5(j)(1) 18

REIMBURSEMENTS FOR TRAVEL EXPENSES Ordinary and necessary business expenses Incurred while traveling away from the employee s home overnight Are excludable from taxable wages, if: reimbursements made under an accountable plan 19

Per Diem Method of Reimbursement Deemed substantiated without receipts Requirements of the regulations must be met 20

Maximum Amounts for Per Diem Allowances Use Federal per diem rates Rates are revised each year, and are available on-line as IRS Publication 1542 Revenue Procedure 2011-47 and Notice 2011-81 for special rules 21

Per Diem Rates Employers may use lower per diem rates than the Federal rates Accountable plan rules apply If a rate higher than the Federal rate is used, the excess is taxable 22

Per Diem Allowance Three conditions must be met for the payments to be excludable: Same or less than Federal rates No receipts are required if a per diem allowance used, but meet the other substantiation requirements including time (date), place, and business purpose. substantiation requirements meet the Federal requirements 23

Reimbursement or Per Diem Paid Under a Nonaccountable Plan? Per diem payments under a nonaccountable plan = wages Subject to Federal income tax, and employer and employee social security and Medicare taxes Included in wages in boxes 1, 3, and 5 on Form W-2 24

Transportation Expenses Costs for local business travel that is: not away from the tax home area overnight, and in the general vicinity of the principal place of business. Excludable if accountable plan 25

Reimbursements for Transportation Expenses Excludable from income if they are provided for: Daily transportation Between: one work location and another the employee s residence and a temporary work location outside the metropolitan area where the employee generally works. the employee s residence and a temporary work location in the same business (regardless of distance) if the employee has a regular work location away from the residence. the employee s residence and another work location in the same business, if the residence is the employee s principal place of business. If none of these situations apply, the transportation expenses are commuting and are taxable if reimbursed Rev Rul. 99-7. 26

Commuting Costs Travel between employee home and main place of work Not deductible expenses and Cannot be excluded from wages. 27

Transportation Expenses: Temporary or Indefinite Assignments For temporary assignments in the general area of the tax home generally not taxable For indefinite assignment generally are taxable ILM 199948019; Rev. Rul. 99-7 28

Temporary Transportation Expenses To exclude transportation expenses under a temporary assignment: expected to last, and actually does last, one year or less Away from the main place of work Not for commuting 29

"Temporary" Transportation Assignment Becomes "Indefinite" If determined to be temporary at time assignment begins, considered temporary until the date the expectations change At that time, the transportation is considered "indefinite" and Any reimbursements from this date are taxable 30

Substantiation Required for Transportation Expense Reimbursement to be Excluded from Wages Must prove: Amount, date and time, place and business purpose of expenses, and Keep contemporaneous records such as receipts No accountable plan-- taxable 31

Thank you! Email Lori.A.Stieber@irs.gov to receive email invitations to our monthly, Phone Forums. If you would like to ask a question, you may call 1-877-829-5500 32

department of the treasury internal revenue service www.irs.gov 33