Company Disaster Relief: Now Easier To Access
In the previous years, the Internal Revenue Service has had a positive light on corporations that provide their employees funds in times of natural calamities or personal times of trouble, even allowing programs to their affiliated foundations. However, the IRS has learned that some companies have used this to their benefit instead of the benefits of their constituents and have decided to discontinue these approvals.
In recent times, and due to the aftermath of the terrorist attack of 9-11 and Anthrax attacks in the United States of America, the United States Congress created and enacted the Victims of Terrorism Act to respond to the needs of the citizens in times of these kinds of disasters. The IRS says on the issue of corporations private foundations providing relief to the victims would not be treated a violation.
There are now allowances provided for companies to allow help to their employees without the fear and problems of paying excise tax penalties incurred for violation on the prohibition of self-dealing.
This can be quite complicated for the layman with all the legal terms and definitions. To make things easier to understand, the act basically allows company to provide financial assistance to their employees in times of disaster without being penalized by the IRS.
But things are not that easy since the IRS has some provisions in place that can still greatly affect the release on funds. The laws can be tricky and corporations are cautious so that they are not reprimanded and penalized for any violations. Now the question is what would qualify as a disaster.
A criterion has been release outlining what is to be considered as a disaster. According to the act, any disaster from terrorist attacks or caused by the military are considered. If the president has issued or declared a situation as such, accidents in public vehicles like airplanes and other forms, or as determined by the secretary of treasury to be catastrophic, and disasters as announced by the federal government and local law enforcement agency.
New changes and other information on the Tax Code have also been included that would allow employers to directly provide assistance to their employees financially though hardships caused in times of disasters, take note these has to be qualified disasters, and the need to go through their private foundations would not be necessary.
Another Question is what would be qualified as disaster relief payments? Such payments include funds refunded or paid within reason for personal use, family, or death expenses, or such as home repair and rehabilitation of its contents. This cost must be caused by a declared disaster.
There are other instances that are in question such as if community foundations should or even permitted to accept these donations from private foundations with a corporate sponsor. In these cases, it would be advisable to check the provisions set out by the Victims of Terrorism Tax Relief Act and the Technical Explanation in how these funds should be used and allocated.
In recent times, and due to the aftermath of the terrorist attack of 9-11 and Anthrax attacks in the United States of America, the United States Congress created and enacted the Victims of Terrorism Act to respond to the needs of the citizens in times of these kinds of disasters. The IRS says on the issue of corporations private foundations providing relief to the victims would not be treated a violation.
There are now allowances provided for companies to allow help to their employees without the fear and problems of paying excise tax penalties incurred for violation on the prohibition of self-dealing.
This can be quite complicated for the layman with all the legal terms and definitions. To make things easier to understand, the act basically allows company to provide financial assistance to their employees in times of disaster without being penalized by the IRS.
But things are not that easy since the IRS has some provisions in place that can still greatly affect the release on funds. The laws can be tricky and corporations are cautious so that they are not reprimanded and penalized for any violations. Now the question is what would qualify as a disaster.
A criterion has been release outlining what is to be considered as a disaster. According to the act, any disaster from terrorist attacks or caused by the military are considered. If the president has issued or declared a situation as such, accidents in public vehicles like airplanes and other forms, or as determined by the secretary of treasury to be catastrophic, and disasters as announced by the federal government and local law enforcement agency.
New changes and other information on the Tax Code have also been included that would allow employers to directly provide assistance to their employees financially though hardships caused in times of disasters, take note these has to be qualified disasters, and the need to go through their private foundations would not be necessary.
Another Question is what would be qualified as disaster relief payments? Such payments include funds refunded or paid within reason for personal use, family, or death expenses, or such as home repair and rehabilitation of its contents. This cost must be caused by a declared disaster.
There are other instances that are in question such as if community foundations should or even permitted to accept these donations from private foundations with a corporate sponsor. In these cases, it would be advisable to check the provisions set out by the Victims of Terrorism Tax Relief Act and the Technical Explanation in how these funds should be used and allocated.