In addition to the obvious challenges facing Houston, TX and the surrounding area, our clients are finding another challenge emerging from the Hurricane Harvey catastrophe, and that is mobility-related tax questions surrounding disaster assistance. These questions face transferees, Relocation Management Companies and their clients and are increasing in their frequency and complexity.
At Ineo, our Tax Services team have faced the following examples in the last few days alone:
• “Is there any historical precedent or examples of tax relief being given to a relocating employee and/or the burden of cost to their employer who are paying for the relocation benefits?”
• “If someone’s taxable relocation benefits need to be extended as a direct result of a natural disaster (e.g. hurricane Harvey) resulting in flight layovers, cancellations, hotels, rental cars, meals, extensions on temporary living etc. is there any type of forgiveness on the tax liability since the situation would have likely been unavoidable?”
• “If a company wants to provide additional tax assistance as a result to the employee they in turn are taking on additional costs due to the unavoidable event. Is there any type of forgiveness to a company as it relates to those costs?
• “If taxable expenses are incurred can they be applied as non-taxable or considered as a “business” expense as an alternative?”
Many of our clients are taking advantage of IRS section 139 and reimbursing their affected employees/transferees accordingly. https://www.law.cornell.edu/uscode/text/26/139
If you have questions about the application of this rule, or are interested in talking with us about how to best handle these unique situations, please contact our Ineo Tax Chief Compliance Officer David Oltman at firstname.lastname@example.org or Direct: 203.529.8173. Please also feel free to reach out to me if I may be of assistance to you. We’d be happy to help you navigate through these most unusual circumstances.
Our thoughts and good wishes go out to all who have been, and will continue to be, impacted by this disaster.
Tim Kernan, CRP
Chief Revenue Officer
372 Danbury Road | Suite 200 | Wilton, CT 06897 USA
Mobile: +1 203.306.7870