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Section 3.4.3 Reporting of Income Paid to Third Parties

Conference Manual Section No. 3.4.3 PAYMENTS TO THIRD PARTIES FOR CONTRACTED SERVICES, AWARDS, HONORARIA, PRIZES, TRAVEL GRANTS, SCHOLARSHIPS AND TRAVEL ADVANCES (US and NON US RESIDENTS)


Conference Manual

Section No. 3.4.3


PAYMENTS TO THIRD PARTIES FOR CONTRACTED SERVICES, AWARDS, HONORARIA, PRIZES, TRAVEL GRANTS, SCHOLARSHIPS AND TRAVEL ADVANCES (US and NON US RESIDENTS)


The following types of payments may be required to be reported to the IRS: Contracted Services, Awards, Honoraria, Prizes, Travel Grants, Scholarships and unaccounted for travel advances. In some cases, Federal tax withholding may also be required. This does not affect reimbursements of actual expenses, which are not reportable (such as travel reimbursements.)

Contracted Services


  • US-based companies and individuals residing in US as well as non-US-based companies and individuals not residing in the US must supply the following:
  1. Name of Individual or Company;
  2. Address;
  3. US Federal Tax Identification Number or Social Security Number or National Taxpayers numbers;
  4. Contracts or letters of agreement.
  • In both cases, the approving volunteer must submit the above information (see approval form) to the Office of Financial Services at ACM Headquarters six weeks before any payments are made. ACM will respond within one week of receipt regarding IRS requirements including any possible withholding.


Awards, Honoraria and Prizes


  • US-based companies and individuals residing in US must supply the following:
  1. Name of Individual or Company;
  2. Address;
  3. US Federal Tax Identification Number or Social Security Number.
  • Non US-based companies and individuals not residing in the US must supply a description of the type of payment, names, addresses, and US Social Security or national taxpayer numbers; for prizes and awards, the description must state if it was based on a competition; for awards, honoraria payments and prizes, the payee must indicate on the approval form the number of days they have been and intend to be in the United States in the calendar year that the event takes place in;
  • In both cases, the approving volunteer must submit the above information (see approval form) to the Office of Financial Services at ACM Headquarters six weeks before any payments are made. ACM will respond within one week of receipt regarding IRS requirements including any possible withholding.


Travel Grants


  • Travel Grants paid to individuals to attend an ACM event for educational purposes, as observers must meet the following criteria:
  • The grant payment must not exceed the cost of attending the event;
  • The awarding of the grant must be done on a non-discriminatory basis;
  • The grant must be available to the interested public at large. The approving volunteer must submit the following to the Office of Financial Services at ACM Headquarters six weeks before any payments are made (see approval form):
  1. A description of the circumstances under which the grants are issued;
  2. The names, addresses and US Social Security numbers or national taxpayer numbers of the grantees.


Final steps:

  • After reviewing the information in a. and b. above, ACM will inform the approving volunteer within one week of receipt if there are any IRS requirements;
  • The approving volunteer then issues a letter to the grantee, stating the purpose of the grant, and how it must be used. (Sample "grant letters" are part of this conference manual section).
  • In addition, the approving volunteer must have proof of the grantee's attendance at the event, such as through a sign-in sheet, which must be submitted along with the conference financial records when the conference books are closed.
  • If the grantee does not attend the event, the approving volunteer must ensure that the grant is returned.


Scholarships


"Qualified Scholarships" are normally exempt from IRS reporting if the scholarship meets the following criteria:

  • A qualified scholarship is any amount disbursed to an individual who is a candidate for a degree at an educational institution;
  • The amounts disbursed are to be used for tuition and fees paid to enroll in, or to attend the educational institution as well as for books, supplies, and equipment that are required by the educational institution for that particular course(s);
  • The scholarship payment must not exceed the cost of attending the educational institution, and whenever possible, the check should be issued to the educational institution;
  • The awarding of the scholarship must be done on a non-discriminatory basis;
  • The scholarship must be available to the interested public at large;


The approving volunteer must submit the following to the Office of Financial Services at ACM Headquarters six weeks before any payments are made (see approval form):

  1. A description of the circumstances under which the scholarships are issued;
  2. The names, addresses and US Social Security numbers or national taxpayer numbers of the scholarship recipients.


Final steps:

  • After reviewing the information in a. and b. above, ACM will inform the approving volunteer within one week of receipt if there are any IRS requirements;
  • The approving volunteer then issues a letter to the scholarship recipient, stating the purpose of the scholarship and how it must be used. (A sample "scholarship letter" is part of this conference manual section).
  • In addition, the approving volunteer must have proof of the scholarship recipient's attendance at the educational institution, along with receipts for tuition, fees and books;
  • If the scholarship recipient does not attend the educational institution, the approving volunteer must ensure that the scholarship money is returned.


Travel Advances


ACM volunteers requesting advances for travel must provide their US Social Security number or national taxpayer number on the Volunteer Travel Request, Authorization and Approval Form.


Expense reports should be submitted along with the required receipts within ten days of completing travel. No new travel advances will be issued while old advances remain outstanding. Failure to provide an expense report for which an advance has been given will result in the advance being reported to the Internal Revenue Service.


Date Revised: July 3, 2002 by Rachael Barish barish@acm.org