Comments on: High level employees of nonprofit organizations that receive non-monetary compensation could be subject to sanctions! http://katovichlaw.com/2009/06/18/sanctions/ Just another WordPress weblog Sun, 18 Jul 2010 19:23:31 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Dmitriy Kustov, CPA http://katovichlaw.com/2009/06/18/sanctions/comment-page-1/#comment-5 Dmitriy Kustov, CPA Mon, 06 Jul 2009 19:48:46 +0000 http://katovichlaw.com/?p=344#comment-5 The IRS is making sure that everyone follows the W2 reporting rules for taxable fringe benefits, such as use of autos. In order to properly account for business vs. personal use, an “accountable reimbursement plan” is required. Employer must substantiate its business use by showing that based on records maintained by employee or other evidence corroborating employee’s statements, all or a portion of the auto’s use was in the employer’s business, and any personal use was included in the employee’s income. This basically means maintaining usage logs to some extent. A trick to avoid having to keep usage logs: there needs to be a written policy prohibiting any use of company car except for commuting. Employee still includes a portion into W2 but there is no need to maintain contemporaneous records. The amount included into W2 is the lease value method (based on the annual tables published by the IRS). For vehicles with FMV under $15,000 (passenger)/$15,200 (trucks or vans) in 2009 a mileage method can be chosen (55 cents per personal mile for 2009). The IRS is making sure that everyone follows the W2 reporting rules for taxable fringe benefits, such as use of autos. In order to properly account for business vs. personal use, an “accountable reimbursement plan” is required. Employer must substantiate its business use by showing that based on records maintained by employee or other evidence corroborating employee’s statements, all or a portion of the auto’s use was in the employer’s business, and any personal use was included in the employee’s income. This basically means maintaining usage logs to some extent.

A trick to avoid having to keep usage logs: there needs to be a written policy prohibiting any use of company car except for commuting. Employee still includes a portion into W2 but there is no need to maintain contemporaneous records.

The amount included into W2 is the lease value method (based on the annual tables published by the IRS). For vehicles with FMV under $15,000 (passenger)/$15,200 (trucks or vans) in 2009 a mileage method can be chosen (55 cents per personal mile for 2009).

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