Re: Response to Proposed IAC Banishment Change

[Wayne Precht <wayne@apollo.umuc.edu>]

>   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.


Galmr.