Discussion:Insurance salseman 1099 travels

Neil

Of course the reimbursement goes on the 1099.

Happens all the time.

While there is no such thing as an accountable plan arrangement for the IC, both Publication 463 and the instructions for the 1099-MISC indicate that if the IC accounts for the expense to the customer, he does not show the expense in gross income:

"If you received a reimbursement or an allowance for travel, entertainment, or gift expenses that you incurred on behalf of a client, you should provide an adequate accounting of these expenses to your client. If you do not account to your client for these expenses, you must include any reimbursements or allowances in income." This is Publication 463. This can be extremely important in localities where mercantile taxes based on sales are levied.

I recall that when I first posted on this board, there was a lengthy discussion of the amounts to be included on a 1099-MISC. Discussion: Include Mileage on a 1099-MISC

Switching between my two hats for this post (see profile)

1) The local govt I work for has several volunteer drivers for various programs who are reimbursed with a standard mileage $0.12/mi. Would the psuedo-accountable plan arrangement described by D&T above pertain to volunteer/local govt relationship the way it does between IC/client and exclude reimbursed amounts from gross income?

2) The govt 1099s the volunteer drivers, which they deem to be a "hassle". Wearing only my tax preparer hat, would the driver (taxpayer) report the reimbursed amount on line 21 and back it out as "excludable from income" nettig to -0-?

3) Since the reimbursment is only $0.12/mi, is the driver (taxpayer) allowed the difference between the standard mileage for volunteers and the $0.12 reimburment from the local govt, assuming they itemize? (My gut tells me no)

Did not find anything explicit in Code Sec 170; Pubs 463, 525, 526; or a CCH Master Tax Guide.

Thanks you any guidance.

For the principals applied to meilage.

You get a donation deduction (standard mileage rate less reimbursement rate).

- Refers to "employees" and "performance of services by emplyees" throughout. Understandably so.

- The only time I saw reimbursment from a charity may be excluded from income is in Sec 3.10 refering to Sec 304 of KETRA - not applicable.

- Sec 9 of the REV PROC, APPLICATION, again refers to employees and business miles save for the self-employed bit in Sec 9.08.

Since volunteers aren't explicitly cited in the literature, it would seem to me that the amount reimbursed from the govt to the volunteer drivers should be included in the taxpayer's gross income only to be deducted if the taxpayer itemizes. Keeping in mind the assumption of an "acountable plan arrangement" similar to what is being described for ICs in Pub 463.

Or, do I need learn how to better interpret Code and Rev Procs?

Initially, I had been misinformed. The local govt reimburses the volunteer drivers at a standard rate of $0.465/mi. Since 1099s are being issued to the drivers, wwould they be considered volunteers ($0.14/mi std rate) or do they have to be an IC?