Fringe Benefit Resource List

Transcription

1 IRS Issues The Internal Revenue Service (IRS) has determined school districts and ESDs as well as other municipal corporations and state agencies may not be in compliance with all IRS regulations affecting them. We are working with the IRS and WASBO to provide training to school district personnel, hopefully in mid to late June. In the meantime, the following is provided to assist school districts and ESD s with tax related issues. Resources for answers are found in many places, the Internal Revenue Code (IRC), US Treasury Regulations, IRS Publications, IRS Revenue Procedures, IRS Revenue Rulings, the IRS Website, and through calling IRS for taxpayer assistance. We have provided some resources below, although this is not intended to be a complete listing. Fringe Benefit Resource List Federal Per Diem Rates Federal rates can be found in the current IRS Publication 1542 or on the Internet at the following addresses: For High Cost Locations-Continental USA: General Services Administration Per Diem Rates For High Cost Locations-Non continental USA and Foreign Locations Federal Agencies to Call IRS Taxpayer Information IRS Taxpayer Information (TDD) IRS Taxpayer Information (For assistance with longstanding tax issues) IRS Forms Ordering IRS Forms Ordering (TDD) IRS Portland Office (FAX number for government assistance) Internet (US Treasury-IRS) (Look for the IRS Newstand) (Fedworld Information Network) (Good for searching, locating, ordering and acquiring government and business information) IRS Regulations 1 2/15/2000

2 Modem IRS Bulletin Board Social Security Administration Tim Beard , FAX IRS Publications Pub # Title 15 Circular E, Employer s Tax Guide 15-A Employer s supplemental Tax Guide 463 Travel, Entertainment, Gift and Car Expense (Replaces 971) (Business use of car, now Chapter 4) 508 Educational Expenses 521 Moving Expenses 525 Taxable and Nontaxable Income 526 Charitable Contributions 535 Business Expenses 970 Tax Benefits for Higher Education New publications are generally available after the first of the year. Call the IRS Forms number and make sure you ask for the newest publication. You can also find out when new publications are available through the IRS Internet site. Order IRS publications by calling IRS Code (IRC) Sections Pertaining to Fringe Benefits Note: More than one IRC can pertain to the same benefit. General General exclusion section for non taxable fringe benefits, only applies if another IRC section does not IRC 117(d) Qualified tuition reductions IRC 119 Meals or lodging for employer s convenience IRC 119(d) Lodging for educational institutions, qualified campus lodging IRC 125 Cafeteria plans IRC 127 Educational assistance programs IRC 129 Dependent care assistance program IRC 274 Substantiation IRS Regulations 2 2/15/2000

3 Travel IRC 162(a)(2) IRC 3402(s)(I) IRC 62(c) IRC 274(h)(2) Moving Expenses IRC 82 IRC 217 IRC 217(b) IRC 162 IRC 3401 Transportation (f)(1) (f)(5)(e) (f)(5)(b) (f)(2)(a) (f)(5)(a) (f)(2)(c) (f)(2)(b) -6(d)(2) -6(d)(2)(A) -6(d)(2)(B) -6(d)(2)(iii)(A) -6(d)(2)(iii)(B) Awards and Prizes IRC 74(a) IRC 3121(a)(20) IRC 274(j) (e) IRC 74(b) IRC 414(q) IRC 274(j)(2) Bonuses IRC 61 Overnight Rule Away From Home, Reimbursed meals while on business, deductibility criteria Employer s election not to withhold income tax on personal use of vehicles, must inform employee and include on W-2 General rule for meal allowances/reimbursements Reimbursed meals while not in travel status Cruises Moving expenses, general rule Moving expenses, general rule, employer Reasonable moving expenses Moving expenses, when employee claims Moving expenses, employment taxes on employee Employer s qualified plan Transportation expenses, general rule Employee defined Definition of commuter highway vehicles Dollar limitations Transit Pass, definition Qualified parking, definition Parking, dollar limitation Cab fare Defines occasional Defines overtime Special rule for unusual circumstances and unsafe condition Defines unusual circumstances General rule Taxable unless specifically excluded Qualified employee achievement awards (length of service and safety) (See also IRC 74(c)(1)) Nominal holiday or special occasion gifts Exceptions for prizes and awards transferred to charities Must be plan, cannot discriminate in favor of highly compensated employees Valuation of award, may require appraisal General rule Employer taxation/deductions for compensation. Bonuses are supplemental compensation. IRS Regulations 3 2/15/2000

4 IRS Revenue Procedures (Rev. Proc.) Rev. Proc Overnight rule, first and last day of travel, standard meal (per diem) allowance, prorated allowance for partial travel days Rev. Proc When deemed substantiated by IRS IRS Treasury Regulations (Reg.) General Reg (d)(4) De Minimus Benefits, cliff provision (if determined not to be de minimus entire benefit taxed) Reg (g) Timeliness Requirements Reg (c)3) Non accountable plans Reg (a)(2) Funds advanced to employee not repaid on final accounting to employer are considered received (and taxable) to employee Reg (d)-(1)(a) Receipts not required (except for lodging) if substantiation met Reg (a)(4) Payments to employee taxable if no accountable plan Transportation Reg (a) Reg T Reg T(c)(1) Reg Reg (d)(3) Reg (d) Reg (d)(4) Reg (d(5)(v) Reg (e) Reg (f) Reg T(k) Reg (h) Reg T(a)(2) Reg T(a)(3) Transportation expenses Federal mileage rate Substantiation requirements Employer vehicle used party for business/partly personal Defines infrequent, irregular situations Automobile lease valuation rule Daily lease value (vehicles) Fleet average value Vehicle cents-per mile rule Commuting valuation rule Qualified non personal use vehicle Qualified non personal use vehicle Vehicles not used for personal purposes Vehicles not used for personal use other than commuting Meal Reimbursement Reg (c)(4) Meals under accountable plan Reg (c)(5) Meals not paid under accountable plan Reg (c)& (d) Accountable plan rule requirements Reg T(b)(2) Substantiation (meals) Reg (f) Timely return of excess payment within reasonable time Reg (c) and (d) Meals with business meetings Reg T(3) & (4) Entertainment meal reimbursements (also generally) Reg Overtime meal allowance IRS Regulations 4 2/15/2000

5 Moving Expenses Reg (a)(3) Reg (b)(4) Reg (a)(2) Travel Advances Reg (c)(4) Reg (g)(3) Reg (h)(2) Reg (f)(1) Reg (g) Reg (g)(2) Reg (h)(2) Moving expense payments can be direct or indirect (to employee or to third party on behalf of employee) Costs of travel deductible and non deductible Prior year s expenses-payments by employer-employee options Accountable plan definition/requirements Multiple travel advances, tracking and accountability Amounts in excess of expenses not returned subject to employment taxes Advances unsubstantiated or not returned Determination of reasonable time period for advances Safe harbors Advances that cross a calendar year Independent Contractor Reimbursement Reg T(h) Payments under accountable plan not reported on 1099 Reg T(h)(2) Accountable plan requirements Allowances Reg (c)(1) Charitable Contributions Reg A-13(f) Non taxable reimbursement, disposition of excess amounts Substantiation requirements Professional Licenses, Organization Dues IRC 212 General rule, ordinary and necessary business expenses IRC 162 Deductible as business expense on employee s Fringe benefit if paid by the employer IRC 62 If paid under accountable plan non taxable to employee Subject to tax if not under accountable plan and reimbursed IRC 274 Recordkeeping requirements IRC 274(a)(3) Entertainment and recreational organizations do not qualify IRC 274(a) Dues must be paid for business reasons IRS revenue Rulings (Rev. Rule) Rev Rule Vans and pickups unlikely to have personal use Rev Rule Delayed moves Rev Rule Taxpayer home (official residence) IRS Revenue Notice (Rev. Notice) Rev Notice 94-3 Vanpools IRS Revenue Announcements (Annc.) Annc Employer s election to defer withholding on personal use of vehicle (paid on pay date, quarterly, semi-annual or annual basis) IRS Regulations 5 2/15/2000