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Travel Expenses: Dumb Things your Company has Done

Travel Expenses: Dumb Things your Company has Done

Old Jan 4, 2019, 11:35 am
  #331  
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Originally Posted by Proudelitist
Personal mileage is not paid to rental cars. So, let's say you rent a car out of pocket for 100 dollars, but drive 200 dollars worth of mileage and claim it. You tell the company you drove your personal car, and get 200 dollars, netting a 100 dollar profit. By deception. Fraud.
This scheme creates $100 in income for the employee and a potential bookeeping mess for the employer. If the employer is willing to do this, so be it. But, you can't pocket the $100 extra, have the employer deduct it as a busienss expense and then not report the profit yourself.
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Old Jan 4, 2019, 11:44 am
  #332  
 
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Several have mentioned using the IRS standard mileage rate in order to seek reimbursement for use of a rental vehicle. However, the IRS standard mileage rate is only applicable if you OWN or LEASE the vehicle.
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Old Jan 4, 2019, 11:50 am
  #333  
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Originally Posted by Proudelitist
Personal mileage is not paid to rental cars. So, let's say you rent a car out of pocket for 100 dollars, but drive 200 dollars worth of mileage and claim it. You tell the company you drove your personal car, and get 200 dollars, netting a 100 dollar profit. By deception. Fraud.
There is absolutely nothing in my company's policies about having to own the car I drive. I simply put X-Y, the number of miles (or in my case, km) and the non-taxable amount per kilometere is reimbursed. If I told the company I was driving my personal car, and was not, that would be fraudulent, but since it is simply the distance I have made no such fraudulent claim. Since the actual language doesn't even say 'car' I see no reason I cannot claim mileage if I did the trip by bicycle either - the distance was covered, for a business purpose.

It would be very complicated to tell someone they couldn't claim mileage for a rental car - as mentioned before, what if your car is in the shop?
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Old Jan 4, 2019, 11:54 am
  #334  
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Originally Posted by Often1
This scheme creates $100 in income for the employee and a potential bookeeping mess for the employer. If the employer is willing to do this, so be it. But, you can't pocket the $100 extra, have the employer deduct it as a busienss expense and then not report the profit yourself.
How is it different to me getting a really good lease rate on my car, say $100 a month, and claiming $200 in mileage expenses? How someone comes by the vehicle doesn't seem relevant - if I used my mother's car for work, and put in the mileage, is that fraudulent? It still cost me money (gas) and that is the rate deemed 'acceptable' by the company for travelling from A to B for business. IRS / CRA rules may be different, but if your company is reimbursing, surely it doesn't matter?
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Old Jan 4, 2019, 11:56 am
  #335  
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Originally Posted by rbwpi
Several have mentioned using the IRS standard mileage rate in order to seek reimbursement for use of a rental vehicle. However, the IRS standard mileage rate is only applicable if you OWN or LEASE the vehicle.
Surely the IRS cannot demand a company verifies vehicle ownership of its employees? I thought using CRA / IRS 'acceptable' amounts was to keep below a taxable benefit threshold, not that they had to comply identically as if they were filing their return with the IRS as individuals? Meaning an employer can't pay someone $100 / mile without triggering a taxable benefit, as that is not reasonable.
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Old Jan 4, 2019, 1:37 pm
  #336  
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Originally Posted by emma69
There is absolutely nothing in my company's policies about having to own the car I drive. I simply put X-Y, the number of miles (or in my case, km) and the non-taxable amount per kilometere is reimbursed. If I told the company I was driving my personal car, and was not, that would be fraudulent, but since it is simply the distance I have made no such fraudulent claim. Since the actual language doesn't even say 'car' I see no reason I cannot claim mileage if I did the trip by bicycle either - the distance was covered, for a business purpose.

It would be very complicated to tell someone they couldn't claim mileage for a rental car - as mentioned before, what if your car is in the shop?
No. Your company policy is a civil contract matter. But mileage reimbursment is a federal requirement and stands under law. The IRS law states that you must own or lease the vehicle yourself. So unless you are the registered owner, you cannot claim mileage money. Sure, you could do this for a bike, but that's beside the point. The point is, you are claiming money for distance driven on a vehicle you own or lease. If you don't, claiming it is fraudulent. Rental cars are not owned by you, hence you cannot claim mileage.
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Old Jan 4, 2019, 2:32 pm
  #337  
 
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Originally Posted by bergamini
Agreed. Although I know of some friends whose companies make them go get rental cars for long trips. That doesn't work for me at all because it's easily an extra hour each way to pick up / drop off / fill up, shuttle, park, paperwork, etc. What a waste of up to 25% of your work day for a vry nominal savings by the employer.
My employer's travel policy encourages us to rent a car (and submit actual expenses) instead driving our own on longer trips. On a recent trip of about 300 miles I presented it to my boss this way: I can drive my own car @ $.54/mile for $162. Or I can rent a car at the airport for $50, buy gas for about $35, and pay about $45 for transit to/from the airport. These total $130 hard cost, not counting the soft cost of time spent getting to/from the airport and time picking up/dropping off the vehicle.

"Drive you own car and save the time," answered my boss. ^
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Old Jan 4, 2019, 2:37 pm
  #338  
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AmEx nonsense

this was on the front page of the company website today
American Express has changed how they process late fees for Corporate (Travel) Cards.
Starting with the billing period beginning January 1, 2019, American Express will charge a late fee if your payment is not received on the Next Closing Date of the billing period. Previously, you had to make the required payment within 15 days after the Next Closing Date to avoid the late fee.
The late fee remains unchanged at $39.00. Please make sure to submit your expense reports timely to avoid any late fee charges to your American Express Corporate Card account.
To assist in getting payments to American Express on time, we will begin processing payment for expense reports twice a week, on Monday and Thursday.

it's unclear whether corporate travel accounting will reimburse late fees, but I suspect not -- even though I can't file an expense report before completing the trip
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Old Jan 4, 2019, 6:15 pm
  #339  
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Originally Posted by emma69
How is it different to me getting a really good lease rate on my car, say $100 a month, and claiming $200 in mileage expenses? How someone comes by the vehicle doesn't seem relevant - if I used my mother's car for work, and put in the mileage, is that fraudulent? It still cost me money (gas) and that is the rate deemed 'acceptable' by the company for travelling from A to B for business. IRS / CRA rules may be different, but if your company is reimbursing, surely it doesn't matter?
Analogies never work.

The reason that it is taxable income is because that is what, for those who are US taxpayers, US tax law provides.

Running around saying that X is like Y doesn't matter if X is not income and Y is.
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Old Jan 4, 2019, 6:50 pm
  #340  
 
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Originally Posted by Often1
Analogies never work.

The reason that it is taxable income is because that is what, for those who are US taxpayers, US tax law provides.

Running around saying that X is like Y doesn't matter if X is not income and Y is.
Adding on to this, the tax code around mileage reimbursement indicates that the standard mileage rate is intended to be a catch-all, covering all expenses associated with "owning" and operating your personal vehicle for business purposes - much in the same way that you have a choice between itemizing your deductions or taking the "standard deduction". One of the factors in the reimbursement is depreciation of the vehicle. Since you don't own the vehicle, you can't depreciate it. In the case of a rental, the owner of the vehicle (Hertz/Avis/whoever) is already deducting the depreciation. It is also true that you can't take standard mileage for a borrowed car for the same reason. You can, however, deduct the actual cost of the rental.

I am sure that many will say "Well, *MY* company allows it!", but the answer is probably not. If they are reimbursing you at IRS rates, then they are most likely deducting that on *THEIR* taxes, so they are subject to the same rules. If they are paying more than the standard mileage rate, then they would have to report the excess as taxable income.
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Old Jan 4, 2019, 7:29 pm
  #341  
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Originally Posted by rbwpi
Several have mentioned using the IRS standard mileage rate in order to seek reimbursement for use of a rental vehicle. However, the IRS standard mileage rate is only applicable if you OWN or LEASE the vehicle.
Isn't "lease" a synonym for "rent"?

Or does the IRS say it has to be a long-term lease?
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Old Jan 4, 2019, 8:29 pm
  #342  
 
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Originally Posted by cbn42
Isn't "lease" a synonym for "rent"?

Or does the IRS say it has to be a long-term lease?
No to both questions.
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Old Jan 4, 2019, 9:51 pm
  #343  
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It opens up your company to great liability if the IRS finds out that the company was claiming mileage deductions on mileage payouts to people who were not legally entitled to them. It's a good way to get audited or worse.

I would fire any employee who engaged in this kind of abuse. And if they said "But what difference does it make? If it was true you would pay me " I would call the police.
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Old Jan 4, 2019, 11:40 pm
  #344  
 
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Reading the thread on the mileage vs. rent has been quite interesting. Having had the misfortune to be the "bean-counter" on the other side the equation, my experience is that employees gaming the system have no issues until
a: they are in an accident
b: their vehicle is vandalized while on company business
c: there car is stolen

The reality check that occurs is often very sobering. The first shock may come when their insurance company refuses the claim because they forgot to notify the insurer that the vehicle is being used for business purposes, usually followed by discovering that the insurance repayment is not enough to cover the actual losses. Remember everyone the "mileage" allowance that government gives for reimbursement includes an element for insurance coverage along with depreciation, wear and tear.Yes I have experienced the above issues and the very unpleasant conversations that follow. In the U.S. I have seen instances where the employer requires the employee have their insurer name the employer as an additional insured on their policy thus fulling transferring risk of loss completely to the employee.

My experience is that once employees find this out they suddenly insist that the company rent cars for them if they are on company business. Usually it occurs after a significant out of pocket expense they have incurred.
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Old Jan 4, 2019, 11:41 pm
  #345  
 
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Originally Posted by Proudelitist
It opens up your company to great liability if the IRS finds out that the company was claiming mileage deductions on mileage payouts to people who were not legally entitled to them. It's a good way to get audited or worse.

I would fire any employee who engaged in this kind of abuse. And if they said "But what difference does it make? If it was true you would pay me " I would call the police.
I would never claim mileage on a rental and don't make a ton when I do use my car and get reimbursed because my vehicle requires premium, barely gets 25 mpg in the winter, my prior lead foot means my insurance is $110/month and German cars often have high early depreciation. So the reimbursement rate is not a profit center for me and thus I fly.

With that said, I think the majority of mileage is paid at the IRS rate as a guideline and not because it is being put on the 1040 as mileage. If I rented a car and claimed mileage instead, I'm not sure how my employer would react but I think they wouldn't care that much either way. For most of us, mileage is a pass through expense not put on anyone's 1040 as mileage. I'm a software architect and my company passes through my expenses to my clients who then expense it as a software purchase, vendor travel or even capitalize it. It never goes on anyone's 1040 as mileage. The amount paid is using the IRS amount as guidance not because they are required to.

The IRS amount is a guideline for most companies. If you are claiming it on your 1040 or your employer is, then the rule about it having to be your car applies. I just don't think that's the case for the majority of the people and barring an employer policy expressly prohibiting it, I don't think it would even be a CoC violation. And certainly the police would get a chuckle before they asked you to stop prank calling them.
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