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Thank you for your question, and thanks for using JustAnswer.com
The answer to your question is yes, you can reimburse airfare before the ticket is used, because you are still requiring them to submit the actual expense
So, this is completely acceptable in an accountable plan
Whether or not you would require the person to pay you back for a ticket that is unused would be up to your organization and would not have a tax impact.
In our case, it is volunteers (members of Task Forces, Committees, etc.), not paid employees, that we reimburse for travel expenses. If we were to pay them for the airfare expense before they used the ticket and then they end up not using the ticket and not getting a refund, would our payment to them (in their personal name) need to be considered as taxable income (1099 I suppose)?
They would need to pay you back or else that would be taxable income because it was not paid for your tax exempt purposes
So to confirm... what you're saying is that if the ticket goes unused due to unforeseen circumstances, our non-profit would not be able to simply absorb the expense of an unused ticket with no effect on the volunteer who bought the unused ticket. Rather, unless the volunteer paid us back the funds they received to cover the cost of the unused ticket, we would be required to report the airfare expense payment we made to them to the IRS as 1099 taxable income.
That would be correct.
Is there anything else I can assist you with today?
Thanks, XXXXX XXXXX thing: are you able to refer me to the IRS publication that addresses this issue?
I am sorry, I do not have link to the citation
There is no publication that handles this exact scenario
thanks for your help.