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[lucky_jim]

Dear Deans and Chairs,

Our department of bean counting is now raising a problem that I have never seen before.  We, from time to time, have visiting scholars on campus, and it is standard to send them out for a dinner a time or two with faculty.  As we are a very small school, it can sometimes be hard to drum up volunteers, and I have always offered the hosting faculty member the option of bringing his/her spouse along as an inticement.  I am now being told that we can't reimburse the spouse's meal without endangering our nonprofit tax status!  Is that a real concern?  Are we going to get in trouble with the IRS for buying a spouse a hamburger?  Isn't this an overly narrow definition of what a "business expense" is?

[donstefano]

Can't you make the spouses 'fellows' of your department, or 'volunteers', and give them an unpaid position at the department.

[zharkov]

Our department of bean counting

By "bean counting," do you mean "real" accountants?  Or HR drones or other admin bozos?

This issue seems like a misunderstanding to me.  If they bug you, ask, "Have you asked a CPA or attorney about this?"

[luckyduck]

lucky jim,
You indeed have been lucky.  At our school, the faculty member must pay for all their own meals while interviewing potential hires, to say nothing of inviting their spouse along and expecting the school to foot the bill.  I have not heard of such a practice before.  Wow! 

I am not surprised that some bean counter wants to tighten things up.  Maybe they are just afraid to tell/suggest you that you should not ask the school to pay for this, and are using the "illegal" claim as a smokescreen?

[deleteplease]

I don't like siding with beancounters in general, but I think there is an
issue of legitimate use of public money here. Occasionally attending
social events with visiting speakers and job candidates is part of the
job. Obviously, cost of meals for faculty should be reimbursed. Spouses
should probably not be invited at all and certainly not subsidised. The
rationale behind the meals is that they provide opportunities for discussion
or exchange of ideas or recruiting -- they are not entertainment.

Rather than invite spouses to dinners, why not invite some of your better
students? Or perhaps faculty from nearby schools? In both cases, these would
further the eventual aim of the events, increase the numbers, and have some
real educational purpose.

[zharkov]

BTW, sometimes the bozos use excuses like "we will lose our non profit status" or "it is against state law" or something like that as an underhanded way to just tell people that free meals for spouses are no longer allowed.

These kind of cockamamie stories are just a way to avoid taking responsibility for making a decision.

[aandsdean]

A nonprofit organization (I presume you're at a private school) can do whatever it wants in terms of professional entertainment, as long as that entertainment is related to its mission.

Paying for a faculty spouse's meal while entertaining a visiting speaker certainly falls into that category.  And this is entertainment as well as "educational," as meden suggests--it's community and professional relationship-building.

Here's a trick:  Ask the bean counters if the president's spouse pays for his/her share of the hors d'oeuvres when attending various college events.

For meden, you don't usually get to use state money for meals anyway, at least not on or near campus.

[expatinuk]

I've fallen into this quite often. Sometimes when I travel to conferences and such my husband goes with me. We've had dinner with a scholar from another country and his/her spouse. I can only claim re-imbursement for 1/2 of the meal (my dinner and the scholar's diner... no spouse dinners). Yes, it's anoying... but I think of it that I can't use tax payers money to pay for social activies.

[sibyl]

Some people would say that dinner for a spouse constitutes an overly broad definition of a business expense.

I don't find this an unreasonable policy, even for a private institution rolling in dough.  The "nonprofit status" thing is a fraud, but accountants like lawyers always prefer bright lines.

[bewildered]

lucky jim,
You indeed have been lucky.  At our school, the faculty member must pay for all their own meals while interviewing potential hires...

I've never thought of inviting my spouse.  But I've also never been expected to pay for my own meal while "interviewing potential hires."  And we're talking two private U's and one public U in 3 states.

Now, of course, since this is my 3rd job and I'm a full prof, I simply wouldn't pick up the check and the problem would solve itself, so far as my own cost is concerned (what are they going to do?  send campus security to forcibly remove the credit card from my pocket?)  But again, I've never imagined my spouse would be paid for... or, for that matter, invited!

(If they really insisted that no one's meal would be paid for except the candidate's, well I'm just enough of a jerk to NOT order a meal at dinner, and patiently explain to the candidate that I ate at home to save money.  With any luck, the whole SC would follow my example, and the candidate would be the only one to eat, while we watched her eat and grilled her with questions.  No, I'm being facetious, but presumably the silliness of my suggestion is related to the reason that none of the U's I've worked for have ever expected us faculty to pay for our meals).

[canadatourismguy]

I do not disagree with the sentiments already expoused here but I love to play devils advocate.

So - given the arguments presented that social events not be covered by public money - we also need to:

1. Eliminate taking potential sponsors or donors to sporting events;
2. Eliminate participating in charitable events; and
3. Eliminate paying for the portion of conferences that have a social element, so if there is a wine and cheese, you have to figure out what portion of the fee goes to that and take it off that portion of the registration fee.



CTG

[aandsdean]

I do not disagree with the sentiments already expoused here but I love to play devils advocate.

So - given the arguments presented that social events not be covered by public money - we also need to:

1. Eliminate taking potential sponsors or donors to sporting events;
2. Eliminate participating in charitable events; and
3. Eliminate paying for the portion of conferences that have a social element, so if there is a wine and cheese, you have to figure out what portion of the fee goes to that and take it off that portion of the registration fee.



CTG

There actually are some places where #3 is applied, though thank goodness I've never worked at one of them. 

I think the real issue is, is the participation of the spouse in some way expected or requested by the institution, even if only by implication?  If the answer to this question is yes, the institution should pay.  In my years at a public school, my department had a small amount of non-state money to take care of such things, and that's how we did it.

BTW, in various VPAA interviews I've had in the past few years, my wife has always been invited (hasn't always come), and has always been fully paid for.  This indicates to me that there's some level of spousal expectation along with these jobs, and as such I would expect further support for her during official events such as dinners.  I realize this is somewhat different from entertaining visiting speakers, etc., but I wouldn't be drawing quite so bright a line here.

[bayoucitybeancounter]

You guys crack me up.  I guess I'm not surprised that non-bean counters think we make up rules just to make their lives miserable, but let me assure you this is not the case.  I have enough trouble with facutly without manufacturing more.

This is an IRS issue.  There is no way on earth any university can actually be in compliance with all the rules that are required to maintain tax-exempt status.  We bean counter recognize this.  The IRS does, too.  We play a fun game every year in which the IRS as a government agency notifies the tax-exempt community which infractions will result in Serious Wrath this go-round.  Right now one hot button is executive compensation.  You can thank American University and Oral Roberts and that lot for the current focus, not to metion Sentor Grassley. 

Spousal travel and entertainment is an off-shoot of executive compensation because it is often a disguised form of compensation.  Unfortunately, it's the faculty and senior staff who get burned in all this because there is an unstated expectation that their spouses will sometimes attend business functions and yet the university (fearing Serious Wrath) is cracking down on paying for the spouses.

One poster made a comment about the president's spouse.  I think any of you reading this who work for a private insitution would find it very educational to obtain a read a copy of your institution's Form 990 (tax return).  I think you'll find that many universities employ the spouse of the president in some capacity.  The employee status trumps the spouse status.  Voila - problem solved.

And hey, somebody's got to count the beans.  Those things won't count themselves.  ; )

[qrypt]

And hey, somebody's got to count the beans.  Those things won't count themselves.  ; )

Unfortunately, counting the beans might cost more than is saved by having the beans counted. 

This is especially true if our notion of what needs counting is broader than mere beans - say, goodwill, or morale, or willingness to serve on yet another committee. 

The fact that bean-counters are quick to invoke "the rules" and count only "beans" makes you people the enemy.  The bit about the president's spouse being an "employee" only does your point damage, by the way - it just shows how the rules are manipulated to benefit some and not others. 

[bayoucitybeancounter]

qrypt

I invoke the rules to ensure that my university continues to have tax-exempt status and our researchers continue to qualify for federal research grants.  These privileges require tax returns and financial statements, whether you appreciate or desire those services or not.

The decision to employ the president's spouse is not mine to make or change.  That recommendation did not come from accounting, but from HR.