Responsibilities of the Director, Accounts Payable
The Director, Accounts Payable, is responsible for compliance with the following regulations:
Payments of rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable gains, profits, and income of $600 or more in any taxable year, must be reported to the Internal Revenue Service. Accordingly, a Form W-9 is required from most vendors (e.g. contractors, consultants, and other self-employed workers) who provide services to the University, and a Form 1099 is required to be provided to most vendors who provide such service by January 31st of the following year in which the payment is made.
This section of the tax regulations reflects changes made to the law by the Taxpayer Relief Act of 1997. The final regulations require those who make payments to attorneys aggregating $600 or more per calendar year in connection with legal services must file an information return for such payments. This requirement applies whether or not the services were performed for the payor, so for example, if the university was a defendant in a lawsuit, and was required to pay attorney’s fees, this rule would apply. The filer must also provide to the attorney a written statement of the information required to be included on the return. Note that employers must report entire settlement amounts, including the amount paid to the attorneys, as income to the plaintiff, and also prepare a Form 1099 reporting the amount paid to the attorneys as income to the attorneys. Failure to do so may result in penalty payments to the IRS, as well as obligation to pay back withholding.
In order for amounts paid to employees for business expenses to not be reported as income on the employee's W-2, the amounts must be paid under an accountable plan which satisfies: 1) Business connection; 2) substantiation; 3) return of excess advances; 4) reasonable period of time for substantiation and return of excess advance amount.
See the Holland and Knight article below.
Internal Revenue Service - Allowable Automobile Mileage Rates
The standard per mile reimbursement rate for the use of a personal car for business purposes is established annually by the Internal Revenue Service. The term “car” for these purposes includes vans, pickups or panel trucks.