Using value of old ticket that employer paid for originally
 

A former coworker of mine asked me about an old ticket they have that has value leftover from a business trip that was canceled. They are no longer with the company and so the company would never be able to use that remaining value on the ticket.

Is it possible for them to call AA and give the ticket number and for them to just book a personal flight and use the value on the old ticket? Would the company have any way to see that they used the value from this ticket?

Not likely they'd ever know. I had an interview ticket purchased by a prospective employer and I changed the return and generated a leftover balance.

I contacted their recruiter and advised them they had a credit balance to use and never heard back. I had already declined the job offer.

I feel like this is almost in the same vein of the scam the airlines are perpetuating by having change fees that are greater than the cost of the tickets. I know I've thrown away a few tickets and purchased new ones via work due to this phenomenon.

I know we have contracts of adhesion and all that, but I'm actually pretty surprised the DOT has allowed this practice to continue unregulated.

As a AA platinum, I think you know a credit from a ticket issued in one's name can be utilized with payment of any change fees. If you're asking whether you think it's ok to do so when a former employer paid for the ticket, get ready for a range of responses based on the ethics of the responder.

YMMV depending on the year the credit was issued. The later the better.

Not necessarily true. I work for a large company that has airline contracts and uses a large national travel agency. They have the ability to transfer credits to other names. Occasionally I will book a trip and get less than the ticket cost charged to my credit card because they used somebody else's close-to-expiring credit.

+1

And of course, use of a ticket for personal purposes paid for by an employer would be taxable income. Just sayin'.

Yes, the company, if they are looking, can see the ticket status is EXCHanged and AA will be able to tell them what it got exchanged to.

Not only taxable income but unauthorized taxable income. It could come with a nice pair of cufflinks.

Yes.

Possibly.

The answers to all of these questions are best asked by your former coworker of his (your?) former travel contact. If you still work there and give the wrong advice and he winds up giving you up, ask yourself how you come out of all of this.

Before starting down the technical discussion, how much are we talking here and is it worth it? Sometimes a bit of common sense goes a long way. $50 or $5,000?

Depending on your employer's ticketing deal with AA, it may well have the ability to apply credits to other employees despite what people experience with their standard ticketing rules (and despite the mistaken view that this is a contract of adhesion which it is not and simply shows a lack of understanding of the term).

If the employer has the ability to move credits around, it may already have done so, may still do so, and certainly does not need to consult with your former coworker to do so. Also, depending on the corporate TA it uses, it may well receive reports of how these credits are used just as it receives reports of all changes made to tickets it initially pays for. While many employers could care less, others care a lot.

At a more granular level, the above note is entirely correct that if your former coworker converts the business expense to a personal benefit, that is income and he will need to report it. By the time he pays federal, state, and any other taxes on that income, and goes through the hassle of doing so, we go back to the practical question at the beginning.

That's why this is all something where the nicest thing you can do is throw your hands up and say that it's really all too complex and he ought to call the travel people who will presumably tell him. If he is afraid to do that, presumably he knows the answer.

I had a similar issue with my past employer (large publicly traded firm).

I had to completely re-route a trip and I ended up with $200 credit on LAN.
Ticket was bought through the firm's corporate travel agency but bought with my credit card, later reimbursed.

Every time I logged in I was reminded that I have a credit and should use it whenever possible towards future trips.

The time came to switch jobs and I still had that credit. I called up the travel agency and they told me that they had no way to use that credit towards other employee.
They did not tell me whether I could use the credit or not but in a "wink wink hint way", they told me that if I did not do anything with it and just let it go, the credit would simply stay in my name (to waste).

I would tell "your friend" do the same, make a phone call and ask what's up with the credit. He may get the same answer I got so then he is good to go.

Who paid for the original ticket? If employer, then whether employer can use it or not on someone else is irrelevant. Even if employer cannot use it, the former employee using it is embezzlement and there is a clear paper trial pointing to who embezzled it if someone is looking.

This is no different than booking both an expensive refundable fare and lower non-refundable fare for business travel, refunding the expensive ticket, using the cheaper ticket for travel and submitting the refundable receipt for reimbursement. If no one looks, you can get away with it but again clear paper trail what is going on once someone calls the airline.

Just like any coverup (e.g. Dieselgate), you get away with one until someone starts digging.

"Unauthorized taxable income". Never heard that before. Which statute or IRS rule covers that?

I think that's more than a bit of a stretch.

This is not embezzlement or theft as some seem to think. The ticket was purchased on behalf of the employee, knowing that the airline considers the passenger, not the company to be the purchaser/customer.
There's some contracts that allow companies to move money from one passenger ticket to another. However those are exceptions. As such exceptions it would be hard to prove a person knew that the company could use those funds for someone else.

The ticket is the passengers to do with as they want. However if it was paid by a company and used for personal travel then it becomes taxable income. At this point if they company sees you've used it for personal user they should add it to W2. If they don't you still have responsibility to report it, although IRS may never know if you don't.