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Re: Response to Proposed IAC Banishment Change
> You are correct that reimbursement for some expenses is indeed
> permissible under the internal revenue code. The question is not that
> simple. I think I tried to explain this in the letter to GC and the BoD.
> The question involves whether royalty are "officers" of the corporations,
> whether the travel is required by their office, and whether proper
> accounting safeguards are in place.
> This is not to say that it is or is not being done properly, merely
> that the question is not a simple as it appears. There are lots of picky
> little details in the Code that will bite one if not handled just right!
You are absolutely correct. I am not sure how I phrased it earlier (whether
I said officers or Royalty). Travel expenses incurred by officers of the
corporation while executing their jobs are reimbursable. I am not sure
(from the IRS' perspective) who gets to designate which posts are "officers
of the corporation". I would suspect that that should be up to the BoD.
If that is the case, then the current system is OK as long the appropriate
procedures accounting are followed.