Good morning!

I have been asked to find out how other universities are currently handling
the payment of small incentive payments to non-employees participating in
surveys, interviews and/or focus groups for research projects. I know this
has been a hot topic and one that has probably stirred up a lot of
discussions between researchers, Research Offices and Accounting Offices.
As I'm currently dealing with our researchers about this issue, I would
like to know if any other universities have been successful in finding that
happy medium.

We periodically use small ($5-$10) cash stipends, gift cards or drawings
for prizes as incentives and we are looking for a way to maintain the
confidentiality of the participants, while maintaining compliance with the
IRS, as well as preventing unnecessary administrative burdens on
researchers when dealing with large numbers of participants and small
incentive payments.

We are aware of the IRS reporting requirements for 1099 purposes ($600 or
greater per calendar year) but with much of this research, we are dealing
with confidentiality issues or the impracticality of gathering all of the
necessary information when conducting a large scale survey research. Also,
in light of the national rise in identity thefts and computer security
breaches, many individuals participating in these research projects are
reluctant to provide their name, address and social security number in
return for a $5-$10 gift card. Many of our participants reside in counties
outside of our own county and the chances they would participate in enough
studies with our university each year to reach the $600 threshhold is
pretty slim.

Would it be reasonable to suggest that if the incentives fall below a
certain threshhold (say under $25 or $50) for non-cash incentives then
obtaining only a recipient's name as documentation of payment would be
sufficient? And if the payment is above this particular threshhold, then
the necessary W-9 information would have to be obtained regardless of
whether the payment is being made via cash or non-cash methods.

Whatever insight or discussion anyone can provide on this subject would be
greatly appreciated.

Thanks,
Joyce

Joyce M. Davies, CPA, CRA
Senior Manager, Financial Services
Ohio University's Voinovich School of Leadership and Public Affairs
The Ridges, Building 22, Rm 108
Athens, OH 45701

(P)740-597-2578
(F)740-593-4398
xxxxxx@ohio.edu

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