what you write is debateable (in court). IRS would have to prove intent on the company's part to benefit the wife, or to benefit the couple with a non-work related gift. Otherwise the transaction simply consists of a gift from husband to wife.

You are correct. The company paid for your J ticket to allow you to show up for work well rested and they deduct it as a business expense.
Other than that it is up to you to sleep soundly, or to stay up all night watching movies and kocking down free drinks, or swap seats with your wife.
It is your responsibility to be productive the following day as well.

The IRS problem originates from the consideration that the J seat perhaps is not a business expense, but the company wanted to benefit your wife all along and played an accounting trick. It is up to them to prove that in court.

I believe you meant "BUsiness Legal Loophole SHenanigans Investigation Tipline." The acronym is much better. :D

I value my job and am an ethical person and have signed the company code of conduct. They pay for BE for a reason. So I am rested. I wouldn't do it (swap seats) even if there was zero chance of getting caught. I value my own integrity. BTW our CEO and his wife were on a fairly recent flight- domestic admittedly. I got the UG to F and he was sat in F too. His wife was way in the back - MD88 for those interested DAY-ATL

This is the point I made way up thread.

OPs employer paid for him to be in BE for a reason - so he could get rest and / or work on the flight - and be ready to work.

If the OP failed to perform at his business meeting his employer would soon find out as the client would likely tell them "hey Jack Fred was tired at the meeting why the heck am I paying you guys to fly in Business class for???"

That's the main risk the OP has. Not from the tax man

Agree 100 percent. I own a business. If I had an employee who was supposed to be in business class but was trading the j seat for a y seat why would I continue to pay for it? Answer is I would not. If it happened again I would instantly terminate the person and find someone else who would honor our business contract. If you want your wife to sit in D1 pay for it out of your own pocket.

I am under the impression that this has been discussed many times and the argument is always the same. OP, do what feels right and ethic. IRS defenders, you are making a valuable contribution to the US Economy, keep it up!

That being said, and knowing our nice moderators, I have four letters: IBTL.

First, as to the practical question. Simply ask the lead FA in D1. It won't be a problem, but the FA's will want to know. The FA's may care a great deal about swapping, especially during any aspect of the service. But, that will vary by crew.

Second, as to the employer issue, that is a matter of your employer's policies.

Third, as to the tax issue. If your standard is whether you will get caught, you won't absent some extraordinary circumstance. If the question is whether the wife's use of the employer-paid ticket creates a taxable event, it does. The value of the D1 ticket above Y is taxable income to the wife and she must report it. What will happen is she doesn't? Nothing.

The problem here is that many people on FT apparently believe that it is only an offense if you get caught. But, that wasn't the issue.

So, how do these things come to light? Somebody else from the same company sees this and when that person is about to be terminated, he reports it and claims whistleblower status.

Following the same philosophy, no doubt neither you, nor your CEO, take advantage of drinks in J and you both make sure of getting sufficient sleep.
What about on Sunday nights ? Is the ethical employee ("indentured servant" ?) bound to go to bed earlier, to recover from the weekend excesses ?

You guys remind me of companies codes of conduct in the early industrialized world. Employees were required to maintain virtuous households and not to engage in any disreputable activities including following the wrong religion and contracting debts.

No, it is not. It could be a disallowed business expense for the company.

This thread is something else. :rolleyes:

That said, I believe that what the OP meant to ask was the hypothetical question of whether the crew might allow a seat swap in the very unlikely event that his wife, who is to travel with him on the trip, felt unwell prior to boarding because the OP is a devoted and caring person who could not bear to put an ill spouse in coach on a transatlantic flight.

How do you know this for sure? Maybe they offer this as a perk to valuable employees, and If he deems to use this perk to treat his wife in the manner he thinks she deserves he will be a happy employee and therefore won't being looking elsewhere for employment and furthermore he may be a happier person and therefore a better employee.

But at the end of the day that wasn't the question, the question was would FA's allow this, from my experience on other international and domestic carriers the holder of a premium class ticket may change their seat with anybody, a uniformed member of the military is one example. And doing this with a spouse is just deemed considerate. Now switching mid flight can be a little more complicated but if you talk to the FA's beforehand a single switch is usually no problem I have done this on several occasions myself.

Switching should not be a problem but do let the FA know. Just do it at the beginning of the flight and do not switch back and forth during the flight.

@OP: Could you ask your company to book you a coach ticket instead - perhaps even make a deal with them such as saying "can you fly me in a day earlier and give me a rest/recovery day, as this would still be cheaper than the $4K J ticket you're buying". Such an option may be more of a win-win for both you and your company and takes away the potential ethics issue.

Looks like a win-win-lose proposition. Especially from the OP's wife point of view

Could it be both?

OK, I'll amend my previous comment as follows:

Before takeoff, ask the flight crew if they care if OP and wife switch seats,
AND
Before trip, ask the company if they care if OP and wife switch seats. E.g., "my wife/ SO/friend/companion is coming along (in coach) at no extra cost. Any objections if we swap seats?"

If neither cares whether OP makes the switch, then do it. Or not.

And, I still don't care.

Cmon it is almost 2017 why be honest?

Then the employer says the following: We hope you don't object but we're no longer going to reimburse premium cabin fares.

unless the IRS can prove that the OP's wife performed work for the company it is not possible to define the J ticket as "compensation", or "income".
It could be a "donation" from the company to the wife, but only if there is evidence that the husband acted as an intermediary and planned to do so.
Otherwise it is a donation from husband to wife.

Nope, it would be a "donation" from the company. Sorry, but the IRS is well versed at the little "tricks" to try and not have something taxed. They would consider it taxable income for him. Again, it's unlikely they will ever know. However that doesn't change the fact that it still becomes taxable. It's basically no different a type of scam then someone who says I'll sell you an envelope for $1000, but the envelope happens to have $1000 tickets in it. They know who the value is going to (if they find out) and will consider it taxable for the employee. No different then if the company gave the employee $4000 and said book a ticket for your wife. The $4000 would be taxable income.

I even verified with someone who works with the IRS doing audits. They would consider it taxable income if they find out.

Actually we have a policy on that even when not on a plane. 2 alcoholic beverages will be reimbursed. Anymore and the whole expense claim will be denied.

I stand by my post. If you want to find a way round rules one can. I choose not too. Our company rules are good and yet strict. I choose to abide by them - well what about this, well what about that - well what about - come on.

end of !

Then OP ends up flying in coach. He was planning to fly in coach anyway.

(Plus, he gets to ride in the same cabin as wife, and company doesn't have to pay for a more expensive ticket. Everyone wins.)

Me reading this thread:https://giant.gfycat.com/DecisiveSlu...canwildcat.gif

I can't speak for everyone, but for me even a business class flat bed east-bound doesnt make for a good night's rest. Can't expect a lot of people to be fresh as a daisy at 10am in London after a five hour red-eye from New York, regardless of the cabin they flew in.

When the stated speed limit is 55mph, I know very well that going over it is against the law and may get me a ticket. But I also know that law enforcement has a different limit - they won't pull me over unless I'm well over 62mph. So if I stick to driving at 60mph, I am technically against the law, but the law enforcers will not come after me, which doesn't mean what I am doing is right. This is the "grey zone." You can tell me that if I know that I am wrong, then I should drive at 55. For which I'll just say "sure thing!" and continue driving at 60 anyway as long as I know it's safe. Would it get me a ticket one day? Probably. But the odds are slim.

OP, do what you feel is right, and just don't talk about it. Talk to the FA first if you want to. 99% of the people here have driven in that grey zone and are mostly here to say "no, I'm the righteous one that will never do anything wrong." Besides, those who are firmly against it will most likely say nothing even if they see the switch in front of them - they will just come to Flyertalk and complain about it. :p

this thread has gone bonkers....

OP check your PM

How can it be donation from the company to the wife ? It is the husband who chose to give her the ticket and at any time he could have chosen to sit in D1 himself!
The only way would be to prove that there was previous understanding between company and employee that the wife would have been the beneficiary of the ticket.
Your parallel with the $1000 does nit fit the case at hand in the least.
A valid one would be a company which flies in a consultant and gives him a business class ticket (and writes it off as business expense). The consultant exchanges it for Y tickets for himself and wife.
Can the company still write off the entire amount ? Of course!!! How would they possibly know what the guy is doing with his ticket ?


Yeah, but in F all drinks are complimentary and my point is that the rule you abide by is imaginary. In particular, it is imagined by you.

It's also probably cheaper for the company than a year of marriage counseling on the company's health insurance. :D

I can't even wait to read the whole thread before responding. I'm sure many others have already pointed this out: This is a totally insane comment.

You will have no issue giving your wife the seat. You will have many issues in your marriage if you don't. ;)

Good job it is a free world when I last checked. You think what you want and carry on with the ad hominems.

You said it right: "It's a free world". Slavery and servitude have been eliminated. Employment is regulated by contracts. Other than achieving results and performing tasks, as contracted, people are free to live their lives as they want (enjoying and suffering the consequences of their decisions). An employer cannot tell me what to wear, how to best sleep, or what TV shows to watch outside of work hours. Nor can they tell me how to spend and not to spend my compensation.

Of course, by the same token, people are free to feel a special attachment to their employer. But it is their individual choice and it is not mandated by laws.

A lot of armchair lawyers here.

Re fraud, it hasn't been stated why the policy exists. It may be to have employees be rested after the flight, productive during the flight, or both.

On the other hand, maybe the employer's attitude is "you have a tough job and we want to be happy and not quit and join a competitor or burn out and take a job that doesn't involve travel". Or perhaps "we would like to pay you more, but that creates some internal issues, but instead, go nuts with the T&E". No fraud. We don't know which.

Re taxability, it is taxable, open and shut.

For those who wonder if there are any cases, there are few involving frequent-flier miles, but Charley v. Commissioner from 1996 is somewhat on point. Charley was entitled to fly in first class to travel to clients. He would buy a first class ticket, submit the receipt for it, then exchange it for a coach ticket, upgrade it to first using his miles, and pocket the cash difference.

The difference, the Tax Court and Ninth Circuit held, is taxable income.

http://caselaw.findlaw.com/us-9th-circuit/1205767.html

You shouldn't expect a problem as long as you're okay with not walking between cabins at all during flight. Even one time to give something to your wife and the FAs could tell you to switch.

Even in that case it is not up to the company to define how an employee should best rest. As productivity is concerned, that could be an easier case, but if the employee is productive while sitting in Y the company cannot force him to sit in J.

.

absolutely! The difference between flight cost and reimbursement received, if positive, is compensation and as such taxable. But that does not involve the employer, unless part of a scheme to understate compensation.

But it's not your compensation. It's a tool of your job, a comfortable seat on your way to do your employer's bidding.

You might think of it as a high-power laptop with quality software packages your employer gives you so that you can execute company functions reliably and produce good presentations. If you choose to give this laptop to your spouse for her benefit and you use her old Windows 7 crock instead, then you are defrauding your employer in the same way. Yes, you can probably still do your job but you are forgoing the good tools for bad so that your spouse enjoys the quality that your employer provided you for a specific purpose.

Some sports figures were prosecuted for taking the expensive tickets that were provided for business travel and refunding them for cash, buying a cheap ticket on a LCC, and pocketing the difference in cost. If OP changes tickets with wife, it's the same principle, but in this case he gives the expensive ticket or seat to spouse rather than keeping the money or using the money to buy a D1 ticket for the spouse.

No, this is not the same "principle" at all. In the first case, the "sports figures" were scheming to pocket cash for themselves. This is clearly theft. In OP's case, OP wants to do a good and kind thing by switching seats with op's wife. I literally cannot imagine any employer seeing these two examples as at all equivalent or comparable.
You are acting as though policies and rules and laws are totally black and white and that there is zero room for good judgement or discernment. However, anyone with a brain can see that one of these examples is an act done in very good faith and out of kindness, and the other out of bad faith and for personal gain. Here in reality, there is some flexibility and room when it comes to how things actually work.

No, the fancy laptop is the company's property while the accommodation on DL is not.
Look at it this way:
Major deadline, the company has people working around the clock and provides them food.
Can they force an employee to eat 900 calories when he wants to consume only 300 ?
What if that employee consumes 300 and brings home the other 600 ?
I'm sure plenty of FT-ers will consider that unethical, but the IRS and GAAP do not.
The company is providing a reasonable amount of food for a meal, so that the employee is not distracted and can dedicate himself to work.
The employee accepts that reasonable amount of food and makes what he considers the best use of it.
From the IRS point of view the company provided a reasonable quantity of food which can be written as business expense and does not constitute income for the worker.

If you are still in doubt, let's say that the employee collects his meal, eats part of it and then tosses the rest.
In a Southern plantation it would have been harshly punished, but those days are over.

Way bonkers and it has been a most enjoyable read.