Ah. Well I can't think of any other solutions. You are also correct that this is a service otherwise.
He can certainly refuse payment but cannot direct or control the funds. Only Counsel and your CFO can advise you on how best to handle this without negatively impacting the individual.
Whatever you decide to do - given what you just shared - should first be approved by his advisors.
John
John H. Taylor
919.816.5903 (Cell/Text)
Big Ideas; Small Keyboard
Original Message:
Sent: 9/6/2024 1:15:00 PM
From: Danielle Muller
Subject: RE: pay donation from fall adjunct faculty alumnus
Hi John,
He is the president and majority partner in a financial services company. Per the company policies, he is not permitted to accept outside compensation. If he does,SEC regulations will require him to jump through all sorts of compliance hurdles that will likely cost significant time and money to manage.
Danielle
Original Message:
Sent: 9/6/2024 1:12:00 PM
From: John Taylor
Subject: RE: pay donation from fall adjunct faculty alumnus
Why not simply encourage the individual to accept payment and then make a voluntary gift? Simply explain the complications and suggest this is the best way to achieve their objectives.
I have done this on numerous occasions. It is clean and ends up being essentially a net zero impact on my taxes.
John
Original Message:
Sent: 9/6/2024 1:01:00 PM
From: Danielle Muller
Subject: pay donation from fall adjunct faculty alumnus
We have an alumnus who is teaching a course this fall term. He has indicated that he does not want to be paid; instead, he would like to donate his entire adjunct instructor pay to "an academic scholarship or stipend for an economics student."
Our tax advisor said the following, "The only way the individual can have the compensation excluded from his wages is to completely disavow any entitlement to it. He cannot direct where the money goes; he cannot get a charitable contribution for giving the money back to Union College. The individual essentially has to confirm, in writing, that they do not wish to be paid for the service. If the individual is able to direct where the money goes, he has constructive receipt of the funds and will be taxed on it."
My questions are:
1. If he is not paid and writes the letter, can Union redirect the money from his salary line to another purpose of our choosing?
2. Can this be counted as a Gift in Kind? I would think no, since this is a service not an item.
3. Is there any other complication that I could be missing?
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| Danielle Muller (She/her/hers)
Sr. Associate Director | Advancement Information Services
Union College
office: 518.388.6646 |