Posted on 02/18/2009 4:17:07 PM PST by SeekAndFind
Alaska officials on Wednesday ruled that Alaska governor and former GOP vice presidential nominee Sarah Palin must pay back taxes to the IRS.
The exact amount the governor must pay is not yet known, but the Associated Press estimates she owes taxes on more than $17,000 in per-diem expenses.
State employees who live more than 50 miles away from Alaska's capital, Juneau, are entitled to state aid in the form of per-diem payments. Juneau is approximately 600 miles from Palin's home town of Wasilla, making the governor eligible for the payments.
But before she accepted the vice presidential nomination, Palin charged the state for over 300 nights spent in her Wasilla home, not the governor's mansion in Juneau. Her expenses usually amounted to $60 per day.
On Wednesday, Alaska state officials decided that the per-diem expenses should be counted as taxable income. Palin's spokesman, Bill McAllister, said the governor would pay the taxes.
bttt
I know Alaska is big. Maybe Alaska is a special case and should be reflected that way in the ever expanding Internal Revenue Code. I don't know. (BTW, I am not a fan of the Code).
I am not saying Sarah is not entitled to her per diem expenses. I am saying that in any other state, if you are provided extra money and you are working out of your house, it would be counted as income.
Re: accounting nightmare. I agree. Having to file expense reports on occasion, I can attest to that. 'Pod.
agreed.
Good point.
I think Alaska’s law (and the Internal Revenue Code) needs to be clarified, as I pointed out upthread.
Normally the states don't even bother with whatever part of your perdiem might be subject to taxes until after the federal analysis is run.
As everyone here knows perdiem covers your ordinary daily expenses while on travel beyond 12 hours, or even a shorter time if away from your home (domicile ~ a legal term) overnight.
Correct, you all knew that, right? It is divided into quarter day periods, so every day has 4 quarters, and you have to have 3 quarters (6+6+1 minute) to get to where perdiem is paid.
For federal government employees when they arrive on a flight at their domicile city their perdiem period STOPS the second the wheels touch the runway.
Their perdiem time doesn't start until departure time for the plane (which is different than the gate time). For USPS employees the times are computed differently, unless you are, for example a USPS employee on detail to a federal government agency (yup, lots of times), or simply auditing a federal government agency (like auditing IRS to make sure they've paid their postage correctly ~ some poor fellow gets to do that audit ~ I handled their appeals).
Then there are the various personnel interchanges between the Postal Inspectors and other federal police agencies. Guy could be on a joint agency stake out for 6 months and have his perdiem and expenses computed several different ways for the same stuff several times ~ and you thought this was a uniform system. Ha!).
I have no doubt everybody knew those parts.
Now, for the killer ~ USPS pays your hotel bills directly (through your credit card which they issue you), and your perdiem is handled separately (that's the cash part) except in Alaska, Wyoming and Montana.
I believe somebody asked if size has something to do with this business, and it does. There ain't no places neither, and that counts for more. Texas is bigger than Wyoming and Montana but you are never all that far from a town of some kind. In the three states mentioned above, you can be in places where you're doing an audit on somebody and they have a spare trailer or something ~ gotta' heat it up first, and chase out the coyotes, but there it is and no one has any idea who to pay for the stay. There is, however a perdiem rule that allows you to "pretend to pay" ~ at least I call it that. Right next to the rule flying a non-sched private airplane somewhere ~ that's under the motorcycle rules (with a side car).
Plus, there are military bases, weather stations, airfields and the like, where you might get housing ~ we actually had a couple of guys where we'd been ahead just buying them a camping van. Did buy'em four wheel drive vehicles though ~ there are some nasty roads in this country!
My understanding has always been that IRS will usually not touch your perdiem if you are a government employee or constitutional officer for the simple reason that federal and state perdiem systems simply do not compensate the traveler for all the expenses he or she may incur while traveling.
My experience in government travel has been that while some of it might have been exciting (missing flights that crashed for example) I never recovered all the costs. There were some folks who grew to love the travel part, but they were turning into alcoholics too.
I'm pretty sure the Alaska perdiem system does not compensate for all the costs ~ place is so big an average trip sucks up all your free time, plus, there's a risk flying around. Ask Cokie Roberts. Her father, Hale Boggs, died in a plane with Mark Begich's father, several decades ago.
Ever close out the per diem claims on a dead guy? You have to decide when they died and not a quarter more!
Concerning receipts, she has her State of Alaska Credit Card ~ (She's the Governor so you know she has one) ~ and that generates a stream of "state records" which IRS is bound to respect.
Along the way to this conclusion I recall a discussion regarding potential taxability of USPS per diem (where your expenses might be less than what you got paid) and it was determined that IRS would accept agency records ~ and that would consist of a copy of your own travel voucher. At the time we'd just started working with a travel system that electronically tracked your plane tickets, etc. so that you never really got receipts for them, and they were moving to electronic tracking for hotel bills, etc. ~ so you'd get no receipts there either.
The consequence was that the government (manifest in its disguise as USPS) was generating it's own record stream that would be available to IRS if questions arose.
So why would we even keep a copy of our own vouchers? Self defense would be the only reason. Frankly, I never expect to see an IRS agent so screw the old records.
And get those 900+ FBI files from hilary while you’re at it. Ain’t this fun?
I'm too old and the businesses I've had were too low-money and low-tech to think about having it recorded automatically and electronically. I just saved every scrap of paper I had so nothing could come back on me.
But the media was never too concerned about getting the minor details of this story right in the first place were they?
So far every news story about this particular perdiem issue has been written as if the government was doing the same thing a newspaper or broadcaster would do. That means NONE of the reporters have investigated the slightest detail, and most likely they have no idea where to begin.
Do you think the media really cares whether they got any of the factual details of what happened here right? It looks to me like they had one aim, make Sarah Palin appear to be delinquent on taxes, and they succeeded in that with just the headline.
IMO they should be much more afraid that we get fed up and come together outside the political realm.
Realistically speaking that won’t make them any safer at all. Nor would an absence of firearms if they could magically snap their fingers and make them disappear.
Long live our free Republic!!!
I agree, Ramius. A per diem just pays her back for money out of her own pocket for expenses incurred on the job.
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