Gretchen,

We use a standard form for expenses/reimbursements to cover these
situations.  This issue can be complex, especially for Federal & State
income tax, FICA reporting, etc.  Each form cites the project, Principal
Investigator approving the expense/payment, then full mailing address,
name and social security number of the subject receiving the payment.
Our form has a disclaimer that states we will issue a 1099 IRS form for
all payments and the person understands we will forward the information
to the IRS.  Each person has to have a valid social security number to
receive a payment.  The payments are mailed directly to each person.

This way is extremely time consuming and rather expensive for cutting
small checks ($5 to $50, etc.) but it covers all the legal issues.  The
IRS is satisfied, we have an adequate paper trail to satisfy
reporting/audit requirements.  We have had some problems in the past
with younger people and foreign students not having valid social
security numbers..but that answer is simple..if no social security
number, no check..  Since the IRS now requires social security numbers
for all dependents on Tax Returns this issue has ceased to be a problem.
 Of course this seems to be a hassle to P.I.'s, but rules are rules.

Sincerely,

Chuck Willis
Grant & Contract Administrator
ODU Research Foundation
Phone: (757) 683-4293 Ext. 613
Fax: (757) 683-5290
E-mail: xxxxxx@pobox.hprf.odu.edu