If I recall the original premise, the students are not employees; you stated that "they are helping out" thusly, the "travel pay" is not remuneration (compensation) but is incidental and in furtherance of the study. For reference: 29 CFR 553.101 - ``Volunteer'' defined. (a) An individual who performs hours of service for a public agency for civic, charitable, or humanitarian reasons (improving the human condition), without promise, expectation or receipt of compensation for services rendered, is considered to be a volunteer during such hours. Individuals performing hours of service for such a public agency will be considered volunteers for the time so spent and not subject to sections 6, 7, and 11 of the FLSA when such hours of service are performed in accord with sections 3(e)(4) (A) and (B) of the FLSA and the guidelines in this subpart. (b) Congress did not intend to discourage or impede volunteer activities undertaken for civic, charitable, or humanitarian purposes, but expressed its wish to prevent any manipulation or abuse of minimum wage or overtime requirements through coercion or undue pressure upon individuals to ``volunteer'' their services. (c) Individuals shall be considered volunteers only where their services are offered freely and without pressure or coercion, direct or implied, from an employer. (d) An individual shall not be considered a volunteer if the individual is otherwise employed by the same public agency to perform the same type of services as those for which the individual proposes to volunteer. The primary test as to their specific status of employee or volunteer should be determined before a question could be answered about weather to tax them or not. Just a thought, Robert Gregory Miller Charles R. Drew University of Medicine and Science Administrative Director/Research Administrator Division of Endocrinology, Metabolism and Molecular Medicine xxxxxx@cdrewu.edu Office: 323.563.5961 Fax: 323.563.5966 -----Original Message----- From: Research Administration List [mailto:xxxxxx@HRINET.ORG] On Behalf Of Carolyn Elliott-Farino Sent: Thursday, November 18, 2004 6:43 AM To: xxxxxx@HRINET.ORG Subject: Re: [RESADM-L] group think I second Greg's opinion. See http://www.irs.gov/publications/p15/ar02.html#d0e1122 IRS Publication 15: Employee business expense reimbursements. A reimbursement or allowance arrangement is a system by which you substantiate and pay the advances, reimbursements, and charges for your employees' business expenses. How you report a reimbursement or allowance amount depends on whether you have an accountable or a nonaccountable plan. If a single payment includes both wages and an expense reimbursement, you must specify the amount of the reimbursement. These rules apply to all ordinary and necessary employee business expenses that would otherwise qualify for a deduction by the employee. Accountable plan. To be an accountable plan, your reimbursement or allowance arrangement must require your employees to meet all three of the following rules: 1. They must have paid or incurred deductible expenses while performing services as your employees. 2. They must adequately account to you for these expenses within a reasonable period of time. 3. They must return any amounts in excess of expenses within a reasonable period of time. Amounts paid under an accountable plan are not wages and are not subject to income tax withholding and payment of social security, Medicare, and Federal unemployment (FUTA) taxes. You would have an accountable plan. The rules are clear. Carolyn >>> xxxxxx@COX.NET 11/18/2004 9:20:18 AM >>> 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 >> >> >>====================================================================== >> Instructions on how to use the RESADM-L Mailing List, including >>subscription information and a web-searchable archive, are available >>via our web site at http://www.hrinet.org (click on "Listserv Lists") >>====================================================================== >> >> >>====================================================================== >> Instructions on how to use the RESADM-L Mailing List, including >> 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 > > > ====================================================================== > Instructions on how to use the RESADM-L Mailing List, including > subscription information and a web-searchable archive, are available > via our web site at http://www.hrinet.org (click on "Listserv Lists") > ====================================================================== > ====================================================================== Instructions on how to use the RESADM-L Mailing List, including subscription information and a web-searchable archive, are available via our web site at http://www.hrinet.org (click on "Listserv Lists") ====================================================================== ====================================================================== Instructions on how to use the RESADM-L Mailing List, including subscription information and a web-searchable archive, are available via our web site at http://www.hrinet.org (click on "Listserv Lists") ====================================================================== ====================================================================== Instructions on how to use the RESADM-L Mailing List, including subscription information and a web-searchable archive, are available via our web site at http://www.hrinet.org (click on "Listserv Lists") ======================================================================
