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John: Welcome and thank you for joining the Internal Revenue Service's phone forum on "Travel reimbursements and allowances". My name is John Darr and I am a Revenue Agent in the Federal, State, and Local Government Division of the IRS. Over the next 60 minutes, we are going to discuss some vital travel reimbursement policy information you need to know. With me today for this discussion is Wendy Speelman, also a Federal State and Local Government Revenue Agent. Wendy: Thanks John and good afternoon, ladies and gentlemen. We commonly get questions on how to determine what allowances and reimbursements are taxable. Today, we will discuss several common payments we often see while conducting audits, and the proper treatments of these payments. Our goal today is to help you understand the issues surrounding allowance payments and various reimbursements and the proper tax treatment. We will cover:
John: You should know that this presentation is not official guidance for your specific issues. We are providing general guidance to help government entities understand the employment tax treatment of various payments. We received a number of very good questions from the audience that we will be discussing, but understand that each issue is unique and must be looked at on a case by case basis. If you have a specific question, go to IRS.GOV and enter the keyword search "FSLG Newsletter". There is a list of FSLG Specialists for every State. They are there to help answer your specific question. You can also request a subscription to the newsletter to stay informed of the latest information in FSLG matters. Wendy: Before we get started, just a quick reminder. Your phone lines are muted. We ask that if you must leave us for a moment that you do not put your phone on hold as some phone systems play music when the phone is placed on hold. Now, let's get started. Our first area is compensation paid to board members. Generally, board members and other elected officials are employees of the government and their compensation is taxed and reported on a W-2 Form like other employees. However, compensation for Board members is paid in many different ways. John: That's right Wendy. The most common method of compensating a board member is an amount paid to the board member for attending the meetings. Elected board members or directors are often paid a flat amount; say $20 to attend regular and special board meetings. The payments are not reimbursements for actual expenses, but many times are referred to as a "per diem" or reimbursement. Regardless of what they are called, the payments are compensation and are taxable as wages. Wendy: Board members commonly receive compensation in other various benefits. We are going to discuss a few benefits that we commonly see. These benefits are:
John: The first benefit that we will discuss is board member meeting payments and reimbursements of commuting expenses. This topic is directly related to a question that we received from the audience today. They asked "Is reimbursing members for their mileage to board and/or committee meetings taxable if held on-site?" The answer is that commuting is defined as travel between home and work and is considered an employee's personal expense. And therefore If the government entity reimburses a board member for commuting, that reimbursement is taxable to the board member and subject to employment taxes. So Wendy, what if the government employee takes someone with them on a business trip? What, if any, tax impact would that have? Wendy: That is a great question. Any money paid or incurred with respect to a spouse, dependent, or other individual accompanying an employee on business travel is considered a taxable fringe benefit. However, there are some exceptions. It is not a taxable fringe benefit if:
The term other individual does not include a business associate with valid travel expenses that otherwise would be a valid business expense. John: That's right, Wendy, The expenses must also meet the normal rules for travel expenses. That means that there must be a real business purpose for the individual's presence. Based on court decisions, the presence of the spouse or other traveling companion on a trip must be necessary, not merely helpful, to establish the requisite business purpose. You can find more travel reimbursement information on the FSLG website at http://www.irs.gov/Government-Entities. Wendy, would you like to open the discussion on the tax treatment of payments or reimbursements when the payment falls outside the accountable plan rules? Wendy: Sure, John. Let's make sure we all are current on what an accountable plan requires by examining accountable plan requirements and how reimbursements under an accountable plan work. Under an accountable plan, allowances or reimbursements paid to employees for job-related expenses are excluded from wages and not subject to withholding or reporting. An allowance or reimbursement policy, which does not necessarily have to be a written plan, must meet three requirements, to be considered an accountable plan. They are:
Keep in mind if the requirements of an accountable plan are not met, the reimbursement is considered taxable. Another question we received from the audience relates to the accountable plan rules. They asked "Can employees receive reimbursements or allowance payments via vendor check and therefore receive a form 1099 if over $600? Or should all reimbursements and allowance payments run through payroll?" That is an excellent question. We often discover that taxable payments, such as commuting reimbursements, spousal travel, and money reimbursed outside of the accountable reimbursement plan, are not reported as income to the board members on a W-2 Form. In other instances, we find these payments reported on a Form 1099-MISC as nonemployee compensation. Neither method is the correct way to report such payments. Remember that taxable payments should be reported as wages. John: So what is the correct taxing and reporting for these types of reimbursements and allowances? As mentioned earlier, Elected and appointed public officials are generally employees for Federal income tax withholding and employment tax purposes. When these officials receive payments for services or other purposes that are not excluded from income by tax law, or from income received by violating the accountable plan rules, the money is subject to Federal income tax withholding. In addition, the monies are subject to Social Security and Medicare taxes and are reportable on form W-2. But, if the reimbursement follows an accountable plan and the payment is a reimbursement that is not taxable to the employee under current tax law, you may reimburse the employee and there would not be any reporting on either a form W2 or form 1099. Wendy: Remember board member's companion travel payments or reimbursements are considered income and should be reported on Form W-2. If a travel companion expenses are paid, and the companion is not attending the meeting for a valid business reason, the employee is subject to a taxable fringe benefit. Finally, if a payment falls outside your accountable plan, that payment is considered a taxable benefit. Payments to employees belong on form W-2, not Form 1099. John: Now that we have discussed the issues that effect board members and other elected officials, let's discuss some common issues that we find during our audits of government entities that pertain to reimbursements and allowances that are paid to employees, which as you know, also include board members and elected officials. Government entities frequently reimburse for meals so let's go over the rules regarding meals. The general rule is meals are excludable from the employee's wages IF they are provided:
The first test "On the business premises of the employer" means that the meals must be provided either at a place where the employee performs a significant portion of their duties, OR the premises where the employer conducts a significant portion of his or her business. The second test "Meals are provided for the convenience of the employer" is met if they are provided for a substantial "noncompensatory" reason; that is, the intention is not to provide additional pay for the employee or cover personal expenses of the employee, but for business reasons, it is in the best interest of the employer to provide the meal. Wendy: Remember meals provided to improve general morale or goodwill, or to attract prospective employees, are not provided for a substantial noncompensatory reason and are therefore taxable. Employees receiving cash allowances or reimbursements are not generally eligible for exclusion under Internal Revenue Code section 119. The IRS Regulation section 1.119(a)(2)(ii)(a) reads: "Meals will be regarded as furnished for a substantial noncompensatory business reason of the employer when the meals are furnished to the employee during his working hours to have the employee available for emergency call during his meal period. In order to demonstrate that the meals are furnished to the employee to have the employee available for emergency calls during the meal period, it must be shown that emergencies have actually occurred, or can reasonably be expected to occur, in the employer's business which have resulted, or will result, in the employer calling on the employee to perform his job during his meal period". We have received a number of questions on this topic. The first question is "If an employee travels away from home for the day and has lunch and/or dinner while out on the road, he does not stay away overnight but might be gone over 8 hours, are his meals considered a fringe benefit and therefore subject to payroll taxes?" John: The answer to this is that since the employee does not satisfy the first requirement "On the employer's business premises" and the employee is not staying overnight, as they are not away from home long enough to require substantial rest, the reimbursement would be taxable. Wendy: The audience has also asked whether it makes a difference if the payment is for "actual expenses or based on a per diem amount". John: Keep in mind that if the employee is not in travel status, which we will discuss in a few minutes, actual expenses following the accountable plan procedures must be used. The "deemed" substantiation by using a per diem amount is not applicable when the person is not in travel status and thus the reimbursement would be taxable. Wendy: So are there exceptions to the general rule for meal reimbursements? John: Yes. Treasury Regulation §1.274-2(d)(3) provides that reimbursements for meal expenses directly related to and necessary for attending business meetings or conventions of certain exempt organizations are excludable from wages if the expenses of your attendance are related to your trade or business. These organizations include chambers of commerce, business leagues and trade or professional associations. Treasury Regulations also provide for a di minimus exception for meals or a meal money allowance or reimbursement provided to an employee as a fringe benefit if :
In no event will meal money that is calculated on the basis of the number of hours worked be considered de minimis. So, for instance, if an employee is given two dollars per hour for each hour of overtime after working eight hours, that is not considered de minimis and would be taxable. On the other hand, if meals are furnished immediately after working hours because the employee's duties prevented the employee from obtaining a meal during working hours treasury regulations would allow a tax free reimbursement of the meal. An excellent description of the rules for meals is included in the Fringe Benefit Guide at IRS.GOV/, It can be found by selecting the drop down menu under "Information For" in the right hand corner of your screen, selecting Government Entities, then clicking on the link for "Tax Information for Federal State and Local Governments, then selecting the link for "Educational Resources" We have discussed the rules regarding meals provided by an employer on employer premises, but what about when an employee is travelling for business purposes. Wendy, what is the tax treatment in that case? Wendy: John, this obviously fails the first test since the meal is not provided on the employer's premises. These meals generally fall under the rules for overnight travel expenses, as mentioned earlier, the employee is in travel status. The taxability of these reimbursements or allowances depend on whether the meals are connected to the business travel and whether the expenses are substantiated under the accountable plan rules. Reimbursements or allowances must meet the accountable plan rules in order to be excludable. In addition, employees must be traveling away from their tax home on business. As with other travel-related expenses, the general area of work, not the employees' residence, determines the tax home. So what does traveling "away from home" mean? First, the employee destination must be a substantial distance from the workplace. Revenue Rulings 73-529 and 93-86 indicate that, the tax home includes the entire metropolitan area; therefore, the taxpayer is not away from home unless he or she leaves the metropolitan area. Second, the employee needs to obtain substantial sleep or rest to meet the demands of the work while away from home. John: Wendy, Let me provide a few examples: Say An employee is required to travel from her main place of work to another city 60 miles away to work on a project. She leaves home at 11:00 a.m. on Monday, with plans to return home the same day. She is unable to complete the project on Monday, so she spends the night. After completing the project the next day, she returns to her tax home by 10:30 a.m. Even though the employee had not planned to spend the night and is gone for less than 24 hours, she has met the "away from home" test because she spent the night away from her tax home on business and obtained substantial rest or sleep. Reimbursements for allowable expenses under an accountable plan would not be included in her wages. Here is another example. An employee is required to travel to a city 100 miles away to work for the day. The employee leaves home at 6:30 a.m. and returns for the night at 10:00 p.m. On the trip home, the employee stops for dinner and rests in the car for two hours. Even though the employee has been away from home for substantially longer than his normal workday, the employee is not in travel status. Court cases have ruled that stopping for a meal or rest in a car does not meet the "substantial sleep or rest" rule. In this case, reimbursements for meal expenses are included in the employee's income. For more information about meal reimbursements or allowances, go online to IRS.GOV and under publications see Publication 15-B, Employer's Tax Guide to Fringe Benefits; and Publication 463, on travel rules or go to the FSLG home page and under Educational Products you can find the Taxable Fringe Benefit Guide. Wendy: We commonly refer to employee meal reimbursements when not traveling overnight for government business areas as "Day Meals". In many cases, day meals are paid because a state or local charter allows for them based on distances employees must travel from their normal tax home. . For example if the employee travels outside the county then their meal is reimbursed during their day trip. In some cases, meals were negotiated as part of a union contracts, or it is "just because that is the way the government has done it". An example might be a sheriffs department has an officer that travels to another part of the state in order to pick up an inmate at the state prison. Many sheriff departments have agreements that require the department to pay or reimburse an amount for a day meal during that trip. Although there may be a valid "business" reason for reimbursing that meal and the officer may have travelled outside of the employee's normal tax home, the trip does not require substantial sleep or rest to meet the demands of the work. In this example, the reimbursement or meal allowance is taxable and should be reportable on the employee's form W2. A question we received from the audience asked "If city employees or elected officials are out of town for a day meeting, with no over night stay, and a lunch meal is charged to their city credit card, is this a taxable benefit or is it considered de minimus?" Since this is not an over night trip the meal would be a taxable fringe benefit to the employee unless the employee reimburses the employer the cost of their meal. If they don't reimburse the employer then the cost of the meal should be included in the employee's wages as a taxable fringe benefit. It should be noted that it doesn't make any difference how the meal was purchased; the taxability to the employee remains the same. John: Wendy, since we are talking about issues that relate to the "Tax home" of the employee, another issue that relates to the tax home is lodging within their tax home area. The general rule is that lodging may be excludable from wages if the lodging is provided:
This means the employee must accept the lodging to perform his duties. For example, lodging is furnished to enable the employee to be available for duty at all times, and the employee could not perform the services required of him unless he is furnished such lodging. Wendy: Determining whether an employee is required to accept lodging as a condition of employment requires an examination of the facts surrounding the furnished lodging. Section 119 of the Internal Revenue Code provides exclusions but only for meals or lodging furnished in kind, in other words, when the employer actually provides the lodging. Cash allowances or reimbursements are not eligible for this exclusion. Remember that, just as in the case of the day meals, Federal law takes precedence over a state statute, employment, or union contracts, in determining the Federal tax liability for furnished lodging. The actual facts and circumstances and the requirements are outlined in Internal Revenue Code 119 which determine the liability for Federal income tax, social security and Medicare taxes. John: You know Wendy; many of us have heard or read that exercise is good for us. And as an employer you may even be considering offering athletic club memberships to your employees. This may sound like a great idea, but before you do it, or in case you already do offer this benefit, let's talk about the tax implications. Under Internal Revenue Code section 132(j)(4), the value of any on-premises athletic facility provided by an employer is not taxable to the employees. There are a few factors that determine if this fringe benefit is not taxable. You may have notice that I said "on-premise athletic facility". The term "on-premises athletic facility" is any gym or athletic facility:
Wendy: The athletic facility does not need to be on the employer's business premises. However, the facility must be on property owned and operated by the employer and it cannot be a facility for residential use, such as a resort. The facility could include gyms, swimming pools, tennis courts, golf courses and running or bicycle paths. The exclusion for athletic facilities does not apply to any membership in an athletic facility including health clubs or country clubs unless the facility is owned or leased and operated by the employer and used substantially by the employer's employees, spouses and dependents. Therefore, if the employer is paying for employees' membership to the local gym or Y (and neither are owned and operated by the employer) the membership is considered a taxable fringe benefit, the value of which should be included in the employee's W-2. However, if the employer has a work out facility on its property, and it is owned and operated by the employer and substantially all of the use is by employees then the fringe benefit would tax-free. John: Probably one of the most common reimbursements or allowances an employer makes to an employee is for the employee's vehicle usage. This is generally paid as either a flat allowance amount or as a "cents per mile" reimbursement. And to answer one of the audiences questions, the reimbursement could also be at the actual cost incurred by the employee with receipts submitted under an accountable plan. In general, if a government employer reimburses auto expenses under an accountable plan, the reimbursement is not taxable to the employee. Additionally, the expense would not be deductible by the employee on their personal tax return since the reimbursement was not included in the employee's income. The employee is required to follow the accountable rules of providing the date, mileage, and business purpose for the mileage they submit. Wendy: Allowable Mileage-rate reimbursements for business travel are excludable from the wages of the employee if paid at or below the standard Federal mileage rate. The employee must follow the accountable plan rules and account for the business miles driven. As of January 1, 2013, the standard mileage rate is 56.5 cents per mile. If the employer's reimbursement rate exceeds the standard rate, the excess amount is taxable to the employee as regular wages. When there is an excess reimbursement, the nontaxable and taxable amounts are reported on form W-2 with:
In other words, the taxable portion is reported the same as any other compensation in boxes 1, 3, and 5 with the withholding reported in boxes 2, 4 and 6. John: If a government employer reimburses an employee's mileage under an accountable plan substantiating the business mileage, and the reimbursement is at or below the Federal mileage rate, then:
If reimbursements are not paid under an accountable plan, or the reimbursement exceeds the allowable amounts, the money, or a portion of it, is taxable as wages. Wendy: As was mentioned earlier, the government agency has the option of reimbursing the employee for actual expenses, such as fuel cost. These reimbursements are excludable from the employee's compensation, under an accountable plan. The employee must document expenses and the connection to the business. Expenses that are personal in nature like commuting are never excludable and reimbursement for such personal expenses should be included in the employee's taxable wages. Regardless of how the reimbursement is calculated, in order for it to be considered paid under the accountable plan rules, the employee must provide substantiation to the employer. The travel substantiation rules require the employee to record
The regulations require that mileage be recorded at or near the time the mileage is incurred. For example, monthly expense reports generally meet this requirement. John: As we mentioned, reimbursements for non-business travel, including commuting, is taxable, even if paid at or below, the Federal mileage rate and calculated on the same documentation as an accountable plan. This is considered regular wages and subject to all income and employment taxes. We have mentioned Commuting multiple times today, so let me remind you that commuting can occur for many different reasons. Commuting is personal travel between the residence and the place of business and is considered non-business travel or personal. As a reminder, Commuting can be at the request of the employer or solely initiated by the employee. For example, if you have an employee that normally works Monday through Friday and goes into the office on the weekend. This is still personal commuting, regardless of whether it is required by the employer or initiated by the employee. Here is another question from the audience: "If an employee takes a taxi from their home to work because they have large or heavy project materials that they are bringing with them to work for a presentation, or conference that is business related, is that taxable or non-taxable?" Under the commuting rules that we have described, the reimbursement for the taxi would be a taxable fringe benefit and subject to employment taxes because the employee is considered to be commuting. And as a sidebar, if the employees does not submit a claim for business mileage reimbursement, they can not claim the expenses on their personal tax return. Wendy: John, that was an excellent description on the business use of an employees personal vehicle. Now I would like to cover government employees using government owned vehicle. You should know when an employer provides a vehicle to an employee solely for business purposes there are no tax consequences or W-2 reporting required and the business use is treated as a working condition fringe benefit. However, employees are still required to keep trip records. Remember business use does not include commuting. Employees need to maintain records to substantiate that all vehicle use was for business purposes. What happens when the vehicle isn't used solely for business use? If an employer-provided vehicle is used for both business and personal use, the substantiated business use is not taxable to the employee however the personal use is considered a fringe benefit and taxable as wages. There are a couple of options for the government and the employee in this situation. If the employee fully substantiates the business and personal use, the Government has the option to tax only the personal use of the vehicle, OR the employee has the option to reimburse the employer for personal use rather than having it treated as wages. The Government also has the option to include all use as wages and notify the employee that they are reporting the full amount. Then it is up to the employee to substantiate the business use and deduct it from their - personal tax return, form 1040 schedule A. John would you like to share with us a couple of examples of what may be considered personal use? John: I would be happy to provide a few examples. Keep in mind that this is not an all-inclusive list. We have already discussed that commuting between the residence and work is considered personal use. Vacation, weekend use AND use by a spouse or by dependents is also considered personal use. An exception to personal use limitation is use that qualifies as de minimis. A few examples of excludable de minimis use of an employer-provided vehicle include: Small personal detours while on business, such as driving to lunch while out of the office on business OR Infrequent personal use. Infrequent personal use is generally less than one day per month. This does not mean that an employee can receive excludable reimbursements for commuting 12 days a year. Keep in mind that this rule is available to cover infrequent, occasional situations. Let me give you an example to illustrate de minimis use. Say an employee uses a government motor pool vehicle for a business meeting. The government requires employees return motor pool vehicles at the end of the business day, but the employee is delayed and the motor pool is closed when the employee arrives back at the office. The employee takes the vehicle home and returns it the next morning. Assuming that this is an infrequent occurrence for that employee - generally happening no more than once a month, the commuting value of the trip is a nontaxable de minimis fringe benefit. However, if this tends to be a frequent occurrence, the commuting is taxable to the employee. So Wendy, what kind of documentation is required to determine if there is tax due from the employee? Wendy: Keep in mind that vehicles are considered "listed property" and therefore, in order to support an exclusion from tax, separate records for business and personal mileage are required. If records documenting business and personal mileage separately are not provided by the employee, the value of ALL use of the vehicle is considered wages to the employee. In that case, the employee may be able to itemize deductions for any substantiated business use on their personal Form 1040, Schedule A. If an employee records business and personal use separately, only the personal use of the automobile is considered income. This can have a significant impact on employees and is a sizeable incentive for employees to maintain the required documentation. So John if there is a taxable amount, for either all the use or just the personal use, how is it valued? John: Under the general valuation rule for fringe benefits, the amount to include in income is the fair market value. For vehicle use, fair market value is generally the lease value of the vehicle, which we will discuss in a minute, but other rules may apply in certain circumstances. There are actually three methods that determine the personal use value of a vehicle. They are:
When the employer reports personal use as wages, they must use one of these 3 special valuation rules. Generally, these rules are applied on a vehicle-by-vehicle basis and the employer may use different rules for different vehicles and for different employees. The first method, the Automobile Lease Valuation Method is calculated by:
Keep in mind that under this method, other expenses such as the maintenance and insurance costs are included in the rate and cannot be reimbursed separately. To simplify bookkeeping somewhat, for government entities that have more than 20 vehicles used for business and personal use by employees, a "fleet-average value" may be used to calculate the annual lease valuation. But, there is a criteria that may make this "Fleet-average" calculation difficult for many Government entities. In 2013, each car must be valued at less than $21,200 to use the fleet –average value. For trucks and vans, that amount is $22,300 per vehicle. Wendy: The second valuation method is the "Cents per Mile" rule. To use the vehicle cents-per-mile rule, one of the following tests must be met:
So, looking at the first test, what is meant by "regularly used in the business" To determine this, one of 2 tests must be met.
You meet the standard if the vehicle is:
This method has some additional rules that the government must follow in order to use this method. Once the government selects this method, they must continue using the cents-per-mile rule for the vehicle for all later years, unless the employer can use the commuting rule for any year during which use of the vehicle qualifies under that rule. John: So what happens if the vehicle no longer qualifies for the Cents per mile valuation rule? \ Wendy: If the vehicle does not qualify for the cents-per-mile rule during a later year, you can use, for that year and any year thereafter, any other rule for which the vehicle qualifies. John: In addition, for 2013, the cents-per-mile valuation rule cannot be used for cars with FMV's exceeding $16,000 on the first day of use. The limit for trucks and vans is $17,000. This eliminates a large number of vehicles to use this method. If this method can be used, you calculate the standard mileage rate by multiplying the number of personal miles driven. If fuel is not provided, the standard mileage rate can be reduced by up to 5 and a half cents. So currently, under this rule if fuel is not provided the calculation would be 56.5 cents minus 5.5 cents equals 51 cents per mile times the number of personal miles driven. It is a simple method, but very limited in the types of eligible vehicles. Wendy: The third method is the Commuting Valuation Method. This method, as the name implies, values the personal use of commuting at a fixed amount per commute for each employee. The rate per commute is currently set at one dollar and fifty cents each way. Keep in mind that this is a per trip, per person calculation. So if you have an employee that commutes twice to and from work on the same day it would be calculated as 4 commuting trips at one dollar and fifty cents per trip or six dollars for that day. If that vehicle had 2 employees commuting twice that day, it would be taxable to both employees at the $6.00 for that day. In order to use this method, ALL of the following conditions must be met:
Keep in mind that for this method, the employer -requires the employee to use the vehicle for a business purposes; it cannot be voluntary on the employee's part. An example of this would be, the government has an employee, who is on call 24 hours a day to respond to road emergencies, and he is required by his employer to commute in a vehicle outfitted with communications or other equipment the employee would need if called out at night. This would fulfill the requirement that the employee is required by the employer to commute in a government vehicle. John: As we mentioned, the Commuting Valuation Method is not available to a Control employee. A control employee in a governmental organization is either an: Elected official, or an Employee whose compensation is at least as great as a Federal government employee at Executive Level V which is currently $146,400. The government may also treat all employees who are "highly compensated" (Generally, for 2013, those exceeding $115,000 compensation) as control employees. These vehicles don't need to be driven by the Employee. It could be a chauffeur driven vehicle for these rules to apply. An exception to this could be when the vehicle is chauffeur driven by a security officer working as a body guard. This may be classified as a working condition fringe benefit and not taxable to the employee. For this to be a non taxable working condition fringe benefit there must be a business-oriented security concern that requires that an employee be provided with a vehicle and bodyguard/chauffer's services. The bodyguard/chauffer must be trained for evasive driving techniques for the services to be excluded. Wendy: Let's take a little time to discuss the taxability of Country Club memberships and Seasons tickets to activities like sporting events. Since the O B R A of 1993 amended the tax code to disallow a business deduction for membership dues paid to a club organized for business, pleasure, recreation, or other social purposes, club dues have been eliminated as a working condition fringe benefit in most cases. They are generally always taxable to the recipient. We need to look at "what are considered clubs". Clubs organized for business, pleasure, recreation, or other social purposes generally are entities like: Country clubs, athletic clubs, airline clubs, hotel clubs, and clubs that operated to provide meals under circumstances that are conducive to business discussions. There are several types of organizations that are exempt from the definition of a club, so long as their principle purpose is not conducting entertainment activities for members or guests or access to entertainment facilities for members or guests. This exemption generally applies to business leagues, trade associations, chambers of commerce, boards of trade, professional organizations, and civic or public service organizations like Kiwanis, Lions, Rotary, etc. Tickets to sporting events and similar activities can be a taxable event if they are not infrequent and di minimus. If the employee has season's tickets, this is a taxable fringe benefit, valued at the FMV and subject to the same taxes as the employee's wages. On the other hand, if the employee received the tickets to a single sporting event and the FMV of that ticket is minimal, it would generally be considered di minimus and not taxable. John: This concludes today's forum presentation. We hope that you received some valuable information. And remember: If you have a more specific question you would like to ask you can go to IRS.GOV and keyword search "FSLG Newsletter". Within the newsletter you will see a list of FSLG Specialists for your State whom you can call and ask questions unique to your entity. If you do not already receive the FSLG Newsletter, you can also sign up to receive the newsletter from this page. The IRS has recorded and posted several Webinars on employment tax topics, such as the implications of a section 218 agreement and the treatment of employees versus independent contractors. You can find these webinars on our video portal at www.tax.gov. The webinars conducted by FSLG will be located under the government entities tab. Again, the video portal website is www.tax.gov. You can find publications, forms and many other great resources on IRS.gov. You can easily navigate to the government section one of two ways: You can get there directly by navigating to IRS.gov/govt or by navigating to www.IRS.gov and clicking on the arrow in the upper right corner next to the words "information for" and selecting government entities. On behalf of the Federal, State and Local Governments Division of the Internal Revenue Service, we would like Thank you for attending today's session. We hope today's session has helped clarify some of the issues you have faced when making payments to individuals and determining the proper ways to report those payments. Again if you desire more information, we encourage you to visit www.IRS.GOV. Thank you and we hope you have a great day.
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