Reimbursements for expenses are a non-taxable payments.  Whether you
volunteer or work for gratis is not relevant to the issue.

Greg Schmidt

----- Original Message -----
From: "Pamela Miller" <xxxxxx@USFCA.EDU>
To: <xxxxxx@HRINET.ORG>
Sent: Wednesday, November 17, 2004 4:06 PM
Subject: Re: [RESADM-L] group think

> Travel costs were not "on the student's behalf" but in support of the
> research project. Anyone with  the right skills could have traveled to
> assist the PI. The students may or may not benefit, and even if they did,
> isn't this the point of involving students in research?  I
>
> At 02:37 PM 11/17/2004 -0500, you wrote:
>>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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>>subscription information and a web-searchable archive, are available
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>>
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>>  subscription information and a web-searchable archive, are available
>>  via our web site at http://www.hrinet.org (click on "Listserv Lists")
>>======================================================================
>
> 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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> subscription information and a web-searchable archive, are available
> via our web site at http://www.hrinet.org (click on "Listserv Lists")
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>

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