It seems that we might need more information to be of more specific
assistance. That having been said, the issue seems to be one not
necessarily related to the withholding of tax, but rather, whether the
payment of this travel on a student's behalf constitutes reportable
income (i.e. whether it needs to be included/reported on a Form 1099 or
Form W-2). Although the students receive no salary or stipend per se,
the payment of travel expenses creates a quid pro quo situation. They
are being 'compensated' (albeit perhaps not fairly) for their
participation. The question is whether that compensation (payment to or
on behalf of) is reportable as income. If the answer is yes, the second
question is whether the university has an obligation to withhold tax.
Helen K. Mourat
Senior Grants and Contracts Officer
Research and Technology Development Services
Georgetown University
Harris Building, Suite 103
3300 Whitehaven Street, NW
Washington, DC 20007
(202) 687-1207
(202) 687-3825 (fax)
-----Original Message-----
From: Research Administration List [mailto:xxxxxx@HRINET.ORG] On
Behalf Of Pamela Miller
Sent: Wednesday, November 17, 2004 1:33 PM
To: xxxxxx@HRINET.ORG
Subject: [RESADM-L] group think
I have run into an impasse with our Comptroller, and I need HELP.
We have a PI that has a sub from another university to carry out
research for the USAID.
Our PI has master's students that are helping to conduct this research
under this contract. The students receive no salary or stipend for
their help. However, project funds are used to pay for the student's
travel to Latin America so they can assist the PI with the research.
The problem is that our comptroller's office thinks that the students
should be taxed on the funds spent on their travel because the students
are part of a master's program that requires them to travel abroad and
to write a master's paper.
The comptroller argues that the travel funds are taxable because the
students are "benefiting" from the travel in that the students can use
this experience in Latin America to satisfy the travel requirements of
their master's program and they might actually do some work (i.e., learn
something) in Latin America that they could write about for their
master's papers.
I argue that the students are not required to do their master's paper on
any topic related to this subcontract or to satisfy their field
experience by working on his project in Latin America. They have other
choices. They also earn no course credit for their participation in the
project. Also, the funds spent for student travel is for the
University's benefit (to comply with the terms of the sub) not the
student's.
Now because of this impasse, I will have to get a no cost extension so
that we can iron things out and I am told I need to talk to a new tax
person that has been hired who needs time to "look this up."
Has anyone out there faced anything like this? I need specific
citations to back up my position. It seems to me that this type of
reasoning will undermine the very point of research in higher ed!
Pam
Pamela F. Miller, Ph.D.
Director, Office of Sponsored Projects
The University of San Francisco
2130 Fulton Street
San Francisco, CA 94117-1080
TEL 415-422-5368
FAX 415-422-6222
EMAIL xxxxxx@usfca.edu
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