Corporate Reimbursement Exceeding Cost...

[SkyHog]

Any violations here:

I am going to be doing a business trip on Friday, my employer has agreed to reimburse at the standard rate as if I had driven.

My costs: ~$300
Reimbursement: ~$320

Is that kosher?

 

[TMetzinger]

No problems, until you brought it up in a public forum <grin>.

Two things... The FAA might care if they ever found out about it. The IRS might care - if you get reimbursed for more than your expenses, that might be considered untaxed income.

When I did this I expensed the full rental cost of the airplane and asked for that "not to exceed the cost of another mode of transportation".

Practically, I don't think it matters. In our alternate universe where we try to be in 100% compliance with all laws and regs, it's an issue.

 

[Lance F]

The solution is clearly to get a more expensive plane.

 

[Fearless Tower]

The solution is clearly to get a more expensive plane.

No kidding....I wish I could find a company that re-imbursed like that!

 

[JeffDG]

Hope you don't have any passengers or cargo.

 

[Let'sgoflying!]

$20? You are a fastidiously honest man, Nick!

 

[Bob Noel]

Any violations here:

I am going to be doing a business trip on Friday, my employer has agreed to reimburse at the standard rate as if I had driven.

My costs: ~$300
Reimbursement: ~$320

Is that kosher?

How are the actual costs calculated?

When I used my POV to go to a contractor's facility, I was reimbursed at the standard mileage rate, plus tolls (no parking fees applied). My actual cost was just gas (~$25) and tolls...and who knows what approximately 220 miles really costs on the use of a car that is only driven 7000 miles/year.

Now, if I had rented a car, then I would expect to only be reimbursed for the rental cost - no more, no less.

Me, if it really only cost me $300 for a trip by plane and it was the rental cost of the plane, then I would only expect to be reimburse the $300.

 

[jesse]

Any violations here:

I am going to be doing a business trip on Friday, my employer has agreed to reimburse at the standard rate as if I had driven.

My costs: ~$300
Reimbursement: ~$320

Is that kosher?

How was that value calculated? The answer to that question is what we really need to know.

 

[poadeleted20]

The FAA won't care. The IRS will, so you'll have to report it on your taxes as reimbursement in excess of business expenses on your 2011 tax return, and thus pay tax on that extra $20.

The only other question is making sure your employer understands how you're actually travelling and what it's actually costing you, so when they get your copy of the bill for the plane they won't get upset. Putting in writing that you drove when you actually flew so you get more money is perpetrating a fraud upon your employer and can be punishable by up to termination and criminal charges. Employers usually don't like it when their employes lie to them. I've heard of mid-level managers approving such shenanigans, but when the big bosses find out, they fire both the manager and the employee -- the manager's unauthorized approval doesn't always save the employee's job if the employee knew it was wrong. If this is an effort to skirt a company policy against flying a plane on company travel of which you and the manager are both aware, that's probably going to get you both canned if the bosses find out.

 

[Matthew]

I've heard of companies that do similar - calculate the cost per mile, then give the employee that amount (up to some maximum). Employee then chooses own method of transporation (personal car, rental car, bus fare, train fare, airline ticket, hitchhiking, whatever). As long as employee gets to/from destination on time, employer doesn't care.

Think of it as the travel reimbursement equivalent of per diem for meals.

Now - if you were to fly yourself, what would the FAA think about the whole pro-rata deal? I dunno.

--

edit: your employer may have some insurance reason that would prohibit travel by GA, something to think about.

 

[poadeleted20]

Now - if you were to fly yourself, what would the FAA think about the whole pro-rata deal? I dunno.

If he's by himself, Mangiamele doesn't apply, and I think he's by himself. Right, Nick? In that case, total cost divided by 1 is still total cost, and he can accept full reimbursement.

 

[COFlyBoy]

Check your employers policy on travel reimbursement.

My company specifically describes how to calculate reimbursement for personal aircraft use (one perk of working for an aerospace company). They won't cover actual costs of flying a personal plane, but they will cover up to what it would have cost to fly commercial or drive a car.

 

[SkyHog]

If he's by himself, Mangiamele doesn't apply, and I think he's by himself. Right, Nick? In that case, total cost divided by 1 is still total cost, and he can accept full reimbursement.

No...actually, there will be 2 of us traveling.

Here's the breakdown:

Travel by car: 680 miles * 0.555 = $377.40
Travel by plane: ~4 hours equaling $360 or so

Company has oked travel by general aviation as acceptable, provided I only reimburse the mileage as if I had driven, and don't reimburse fuel costs. Additionally, provided it is flown by a "Competent and legal" pilot (myself included), life insurance benefits are valid as well.

For both of us traveling, we are both conducting the same business at the destination, so there is a common purpose for the travel.

 

[Gary]

No...actually, there will be 2 of us traveling.

Here's the breakdown:

Travel by car: 680 miles * 0.555 = $377.40
Travel by plane: ~4 hours equaling $360 or so

Company has oked travel by general aviation as acceptable, provided I only reimburse the mileage as if I had driven, and don't reimburse fuel costs. Additionally, provided it is flown by a "Competent and legal" pilot (myself included), life insurance benefits are valid as well.

For both of us traveling, we are both conducting the same business at the destination, so there is a common purpose for the travel.

OK'ed by who??

The biggest stickler I've run into are the liability issues should an accident occur. There was NO WAY around it from corporate's viewpoint, hence the easy to understand policy of - No Way, No how, will you fly your own aircraft on anything remotely approaching company business.

Gary

 

[dell30rb]

How are the actual costs calculated?

When I used my POV to go to a contractor's facility, I was reimbursed at the standard mileage rate, plus tolls (no parking fees applied). My actual cost was just gas (~$25) and tolls...and who knows what approximately 220 miles really costs on the use of a car that is only driven 7000 miles/year.

Now, if I had rented a car, then I would expect to only be reimbursed for the rental cost - no more, no less.

Me, if it really only cost me $300 for a trip by plane and it was the rental cost of the plane, then I would only expect to be reimburse the $300.

I did some real quick math and the $100 an hour, 110 knot piper comes very close to the .55 cents a mile my company allows as a reimbursement for driving a personal car on business trips.

For example driving to pittsburgh from raleigh is 1000 miles round trip by car. Thats $550 bucks i'd be reimbursed for driving. Its also 8.5 hours in the car Flying the piper would take 2.4 hours each way and probably cost around $550 including taxi time. Of course with weather deviations and headwinds it may cost more, however driving and flying would be close to the same cost.. and flying can be made as a day trip, where driving would be an overnight trip (mo money for hotel and food) and a ***** of one at that.

 

[SkyHog]

OK'ed by who??

Oked by our VP (my manager), a member of HR and our Code of Conduct adviser. In other words, I have 0 doubt that doing it this way is ok (note, that our policy specifically says this is an option).

The biggest stickler I've run into are the liability issues should an accident occur. There was NO WAY around it from corporate's viewpoint, hence the easy to understand policy of - No Way, No how, will you fly your own aircraft on anything remotely approaching company business.

Gary

Our company takes the (correct) model of equating GA flying with driving.

 

[SkyHog]

I did some real quick math and the $100 an hour, 110 knot piper comes very close to the .55 cents a mile my company allows as a reimbursement for driving a personal car on business trips.

For example driving to pittsburgh from raleigh is 1000 miles round trip by car. Thats $550 bucks i'd be reimbursed for driving. Its also 8.5 hours in the car Flying the piper would take 2.4 hours each way and probably cost around $550 including taxi time. Of course with weather deviations and headwinds it may cost more, however driving and flying would be close to the same cost.. and flying can be made as a day trip, where driving would be an overnight trip (mo money for hotel and food) and a ***** of one at that.

Yep. Winston-Salem, NC to Hilton Head, SC is the route in question. The drive takes you across I-40 to I95 and then down. The flight cuts the corner almost at a 45 degree angle.

It also reduces a 12 hour round trip drive into a 4 hour round trip flight.

 

[TMetzinger]

Yep. Winston-Salem, NC to Hilton Head, SC is the route in question. The drive takes you across I-40 to I95 and then down. The flight cuts the corner almost at a 45 degree angle.

It also reduces a 12 hour round trip drive into a 4 hour round trip flight.

Perfect example of how GA is useful.

Biggest issue will likely be weather. Since I believe you're VFR-only, don't let business pressures make you do somethin' stupid.

 

[Gary]

Oked by our VP (my manager), a member of HR and our Code of Conduct adviser. In other words, I have 0 doubt that doing it this way is ok (note, that our policy specifically says this is an option).

OK, that's a good start.

Our company takes the (correct) model of equating GA flying with driving.

So... your corporate liability insurance policy(s) specifically cover employee use of a private plane?

Not trying to burst your bubble, in fact, it is great that your management supports you flying yourself on company business. Our lower level managers were supportive... till it reached the top, particularly the top level corporate risk manager, that's where things fell apart.

Gary

 

[SkyHog]

Perfect example of how GA is useful.

Biggest issue will likely be weather. Since I believe you're VFR-only, don't let business pressures make you do somethin' stupid.

Very good point.

Unfortunately, weather is going to be rainy, but I don't know if it will be low enough to no go.

I am going to make the call Thursday evening. If there's any doubt whatsoever, I'll be hopping in a car and driving down and spending the night.

Which sucks.

But - if its good (and I mean 0 doubt of poor weather), its on like Donkey Kong.

 

[SkyHog]

OK, that's a good start.



So... your corporate liability insurance policy(s) specifically cover employee use of a private plane?

I have no idea. I do have it in writing from our Legal Dept, our HR Dept, and our VP that this is acceptable. I presume that's good enough.

Not trying to burst your bubble, in fact, it is great that your management supports you flying yourself on company business. Our lower level managers were supportive... till it reached the top, particularly the top level corporate risk manager, that's where things fell apart.

Gary

Well...the VP is pretty close to the top. So is the lawyer that approved as well. I think I'm gonna be fine

 

[Rndmtrvlr]

OK, that's a good start.



So... your corporate liability insurance policy(s) specifically cover employee use of a private plane?

Not trying to burst your bubble, in fact, it is great that your management supports you flying yourself on company business. Our lower level managers were supportive... till it reached the top, particularly the top level corporate risk manager, that's where things fell apart.

Gary

There's a good bit of variability among companies. Obviously, Gary's experience represents the more difficult end of the continuum. On the other hand, some of my companies have been fully supportive of GA as an approved mode of travel, complete with inclusion on the corporate liability insurance. It's all a matter of perspective.

And unless a company has a specific policy prohibiting General Aviation travel or identifying specific "approved only" modes of travel, I'm not convinced there would be any issue anyway. Granted, the first time you applied for reimbursement of travel costs which included avgas or plane rental, they may decide to implement a prohibition.

 

[dell30rb]

When are you flying down? friday afternoon / evening does not look good

I have my eye on the weather as well though it looks like it will be clear for my Saturday afternoon simulated IMC extravaganza. I've actually been hoping for some crappy weather to get some actual.

I haven't seen much out the cockpit windows in a while.

 

[SkyHog]

When are you flying down? friday afternoon / evening does not look good

I have my eye on the weather as well though it looks like it will be clear for my Saturday afternoon simulated IMC extravaganza. I've actually been hoping for some crappy weather to get some actual.

I haven't seen much out the cockpit windows in a while.

Actually, we just rescheduled the meeting for Mid-November now (not beacuse of weather).

Lets hope for good weather then!

 

[flyingron]

My company specifically describes how to calculate reimbursement for personal aircraft use (one perk of working for an aerospace company). They won't cover actual costs of flying a personal plane, but they will cover up to what it would have cost to fly commercial or drive a car.

I think I'm subject to termination for traveling on private aircraft for business. Light aircraft are dangerous. My company would know, we build them, their engines, and their propellers.

 

[dell30rb]

I think I'm subject to termination for traveling on private aircraft for business. Light aircraft are dangerous. My company would no, we build them, their engines, and their propellers.

That's not hypocritical

 

[JeffDG]

Well, since you have a passenger, the FAA will prohibit you from receiving any compensation from your employer for the travel. Your passenger can kick in half, and your passenger can claim reimbursement, but you cannot receive more than your pro-rata share.

Read the following...it's messed up, but it is the current FAA legal interpretation of 61.113
http://www.faa.gov/about/office_org...erpretations/data/interps/2009/Mangiamele.pdf

 

[Fearless Tower]

My company specifically describes how to calculate reimbursement for personal aircraft use (one perk of working for an aerospace company). They won't cover actual costs of flying a personal plane, but they will cover up to what it would have cost to fly commercial or drive a car.

That is how travel reimbursement is done in the Navy. I've been authorized to utilize private aircraft for travel, but re-imbursed at the rate of the cheapest mode of travel which tends to be airline.

In DoD travel, there actually IS a personally operated aircraft re-imbursement rate that pays so much per mile, but I've never seen it authorized that way.

 

[Jim Logajan]

No...actually, there will be 2 of us traveling.

Here's the breakdown:

Travel by car: 680 miles * 0.555 = $377.40
Travel by plane: ~4 hours equaling $360 or so

Company has oked travel by general aviation as acceptable, provided I only reimburse the mileage as if I had driven, and don't reimburse fuel costs. Additionally, provided it is flown by a "Competent and legal" pilot (myself included), life insurance benefits are valid as well.

For both of us traveling, we are both conducting the same business at the destination, so there is a common purpose for the travel.

Just got the November AOPA magazine in the mail today and there is an article in there that you should take a look at since it seems to be relevant; online it is here:

http://www.aopa.org/members/files/pilot/2011/november/counsel.html

If I understand correctly, by taking a passenger the conditional clause in 61.113(b)(2) would be false, so you couldn't accept reimbursement of any amount. But 61.113(c) would still be valid, but only your passenger could pay you, and only $180. Nothing stops them from getting reimbursed any amount in turn from the employer.

Nothing in 61.113(b) seems to limit the compensation if you fly alone, so it seems you could accept $377.40 from your employer. Not sure of the IRS rules on this aspect.

 

[JeffDG]

Nothing in 61.113(b) seems to limit the compensation if you fly alone, so it seems you could accept $377.40 from your employer. Not sure of the IRS rules on this aspect.

I think the IRS would, technically, require you to report the excess as income...but the IRS, unless they really climb up your behind, is going to see Miles * rate=compensation and really not give a crap about the fact that you flew instead of drove.

 

[poadeleted20]

No...actually, there will be 2 of us traveling.

Here's the breakdown:

Travel by car: 680 miles * 0.555 = $377.40
Travel by plane: ~4 hours equaling $360 or so

Company has oked travel by general aviation as acceptable, provided I only reimburse the mileage as if I had driven, and don't reimburse fuel costs. Additionally, provided it is flown by a "Competent and legal" pilot (myself included), life insurance benefits are valid as well.

For both of us traveling, we are both conducting the same business at the destination, so there is a common purpose for the travel.

Oops. Mangiamele strikes again. You cannot accept one cent of reimbursement from your employer for this trip with someone else in the plane without violating the FAA Chief Counsel's reading of 61.113. You can still accept your co-worker's pro-rata share (half) of the direct cost of the flight, and it doesn't matter where your co-worker gets that money. So, if the flight costs you $360, you can accept $180 from your co-worker (and only from your co-worker) and not a penny more from anyone else. I'm not even sure you can claim the rest as an unreimbursed business expense -- that wasn't addressed in Mangiamele.

See Mangiamele and Lamb.

 

[JeffDG]

See Mangiamele and Lamb.

Have you heard anything on efforts to get Mangiamele retracted?

 

[taters]

How was that value calculated? The answer to that question is what we really need to know.

My guess is that the tax deductible IRS mileage rate for company business has something to do with it.

 

[SkyHog]

Oops. Mangiamele strikes again. You cannot accept one cent of reimbursement from your employer for this trip with someone else in the plane without violating the FAA Chief Counsel's reading of 61.113. You can still accept your co-worker's pro-rata share (half) of the direct cost of the flight, and it doesn't matter where your co-worker gets that money. So, if the flight costs you $360, you can accept $180 from your co-worker (and only from your co-worker) and not a penny more from anyone else. I'm not even sure you can claim the rest as an unreimbursed business expense -- that wasn't addressed in Mangiamele.

See Mangiamele and Lamb.

That is incredibly gay. So I have to ask my coworker to submit for the reimbursement, and then have her give me a prorational share?

Or I can go alone and make her drive?

That has to be the worst Chief Counsel interpretation I've ever seen.

 

[taters]

That is incredibly gay. So I have to ask my coworker to submit for the reimbursement, and then have her give me a prorational share?

Or I can go alone and make her drive?

That has to be the worst Chief Counsel interpretation I've ever seen.

its all mickey mouse B.S.

 

[JeffDG]

That has to be the worst Chief Counsel interpretation I've ever seen.

I would say "worst CC interpretation ever", but I've not seen them all.

 

[SkyHog]

I think I have it figured out....

I take the reimbursement, report myself to the FAA, then, when I am issued a revocation, contest it, using the argument that the Chief Counsel must have been drunk when this interpretation was made, and therefore is not a valid interpretation.

Then, we have either conflicting case law, or we can get a competent judge rule, and then all of GA s made better, right?

Anyone see any holes in that theory?

 

[RotorAndWing]

I would say "worst CC interpretation ever", but I've not seen them all.

Remember, it's not an issue until someone feels compelled to write a letter to the Chief Counsel for "clarification".

How many times on this board have you seen the phrase "Let me run this by the Chief Counsel" or "I think I'll write the Chief Counsel and see what they say".

Be careful what you wish for, you just may get it.

 

[denverpilot]

Ahh, the FAA... Promoting aviation once again... Indeed.

 

[Matthew]

That is incredibly gay. So I have to ask my coworker to submit for the reimbursement, and then have her give me a prorational share?

Or I can go alone and make her drive?

Or both - fly one leg, get company reimbursement. Co-worker drives rental car one way, flies other leg with you and pro-rates you for half that leg and gets reimbursed for both expenses.