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Conference 7.286::digital

Title:The Digital way of working
Moderator:QUARK::LIONELON
Created:Fri Feb 14 1986
Last Modified:Fri Jun 06 1997
Last Successful Update:Fri Jun 06 1997
Number of topics:5321
Total number of notes:139771

754.0. "Confusion Reigns Re Eductn Tax" by IRT::WELLIS () Tue Mar 14 1989 14:31

   
       Could corporate personnel management please clearly 
    express and disseminate Digital's policy regarding the 
    1988 change(s) on company withholding of taxes on employee
    educational expenses (i.e., college courses taken during 
    off hours)?  

       If this seems like a minor issue to some, consider
    that the cost of maintaining normal progress (6 credits)
    in an MBA, EE, or Computer Science curriculum at a major
    metropolitan university can easily cost $2500+ each
    semester, and that withholding (fed/local/social security,
    etc.) can easily cost the employee from a third to a half
    of that.
    
       The only guideline that came down here was a memo at
    the beginning of 1988, which stated that supervisors
    should be aware of the applicability of each course for
    taxation since the IRS guidelines had changed. 

       Calls I have made to local and corporate personnel offices
    have resulted in a variety of different answers to the same 
    questions.  Actual implemented policy I have witnessed also
    varies randomly and has ranged from edicts that "all courses which 
    aren't absolutely required for all employees in your position (i.e.,
    absolutely every outside college course) must be taxed," 
    to examples of managers who allow no taxation of certain courses
    depending on their personal interpretation of the guidelines
    (or non-guidelines).

       Adding to the confusion is the fact that the 1988 IRS
    rule change was revoked retroactively by Congress (and
    will likely be revoked for 1989 as well)!  I know that
    some other companies informed their employees who had had 
    taxes withheld on courses in 1988 before the IRS rule revocation 
    and went through pains to adjust the employees' gross year to
    date pay and notify them that they should deduct the expense on their 
    tax returns to get back the taxes that were withheld. I know of 
    no comment made by Digital's personnel management in this regard.

       Adding to the confusion is that the Digital personnel
    manual's sense of "career related" has a definition that is
    not the same as the IRS' use of "job related" (and the distinction 
    between and applicability of taxation for our "job required" and
    "career related" education are not, in my experience, well known by
    managers). Additionally, the application form for training benefits
    gives instructions that were formulated before the IRS changes.

       Believe me, we deeply appreciate the financial help Digital
    provides us in furthering our after-hours education! But please
    help us with a specific statement of policy in the wake of what
    every U.S. corporation has had to admit is serious confusion.  Some 
    of us are having a rough financial time continuing our education 
    under the current circumstances.


	                  William Ellis


    P.S.: See the Sunday New York Times business section of March
          12, 1989 for a discussion of the many changes in the IRS
          rules and what they mean to companies and employees.
T.RTitleUserPersonal
Name		DateLines
754.2Digital needs to clarify, not the IRSBMT::WELLISThu Mar 16 1989 09:057
    
     
        To make it absolutely clear, the conflicting answers I've
     gotten have been from DIGITAL personnel, not the IRS.  The
     policy I would like clarified is Digital's, not the IRS'.

                               William Ellis
754.3it's the IRS that mattersVLNVAX::TSTARLINGThu Mar 16 1989 11:388
    Think you may have trouble getting that.  When you fill out the
    application, I think you have to state whether it is or isn't
    taxable (not sure as I haven't done it).  If you can convince your
    manager that it isn't taxable and the personnel person doesn't
    question it, you're home free.  Seems to me that it depends a lot
    on the manager and their interpretation.  Beware that you should
    have your ducks in line IF the IRS should ever question it as it's
    really their policy you need to worry about.
754.4NCPROG::PEREZOut Dancing with Bears!Sun Mar 19 1989 22:1411
    The last I saw of any of this, EVERYTHING in graduate programs was
    taxable.  My wife is working for another company here in Minneapolis
    and her company does NOT take taxes.  I have friends working for large
    organizations here and they ALSO are not being taxed for graduate
    programs.  I attempted to get local personnel to review the policy
    and change it to be in line with other local companies, but they were
    TOTALLY uncooperative.  Essentially, the response was of the "Tuff
    s***, if you don't like it, don't go to school."
    
    We did, however get a notification earlier this year that UNDERGRADUATE
    courses may not be taxed.  But NO help at all for graduate.
754.5Want to become a speed reader, just receive a letter from the IRSWKRP::CHATTERJEEI wanna hold your LAN - Beatles?Sun Mar 19 1989 22:5220
    A note of caution about all this.  I was audited very thoroughly
    in 1980 (for TY 1976 thru 1979) because I took the deduction for
    educational expenses for a Ph.D.  I was a professor back then and
    to become a FULL PROF one HAD to have a Ph.D. (still do).  Though
    the Dean of Engineering sent many letters to the IRS saying I had
    to have this degree, the IRS disallowed ALL my deductions and I
    had to pay a princely sum in back taxes (plus penalties and interest) 
    for the "pleasure" of all this.
    
    The moral of the story, before you claim anything please check with
    an accountant (at least), or even with an IRS agent (maybe).  Let
    me tell you, the audit process is NOT FUN, as some of you may already
    know.  And,
    
    
    WANT TO BECOME A SPEED READER.......GET A LETTER FROM THE IRS.
    
    
    
    .......... Suchindran
754.6Do you want an official answer?DR::BLINNRound up the usual gang of suspectsFri Mar 24 1989 16:4419
        To the author of the topic note:  This conference is called
        "DIGITAL", not "CORPORATE_PERSONNEL".  While it's possible
        that someone in corporate personnel who understands the issues
        and chooses to respond to your query will do so, it really
        is not very likely.  I've been advised that some of the folks
        from Corporate Employee Relations follow this conference, but
        I don't know for sure whether anyone from Compensation and
        Benefits does.
        
        If you really want to get an answer to your question from the
        relevant people in corporate personnel, I'd strongly recommend
        that you either work up the chain, starting with your local
        PSA or PA, or start at the top (from the listings in the back
        of the Digital Telephone Directory) and work down.  I don't
        think you'll get an official response in this conference (but
        I'd be happy to be proven wrong).
        
        Tom
        wearing both hats
754.7Have a nice Easter! 8-)MISFIT::DEEPAre you suggesting coconuts migrate?Fri Mar 24 1989 18:0211
re: < Note 754.6 by DR::BLINN "Round up the usual gang of suspects" >

>>                      -< Do you want an official answer? >-

>>        To the author of the topic note:  This conference is called
>>        "DIGITAL", not "CORPORATE_PERSONNEL".  


Yo, Tom!    Take it down a thousand, ok?

Bob
754.8It belongs in DIGITALBMT::WELLISTue Mar 28 1989 17:0319
    
         Regarding .6, I asked for corporate personnel to
    "express and disseminate" a detailed policy in response
    to the IRS tax changes.  I hardly expected Digital's
    personnel policymakers to "disseminate" a formal policy 
    statement (which would carry binding legal implications with
    it) in the vehicle of a Notes conference.  That doesn't mean
    that I shouldn't ask (and ask for discussion) about 
    a policy clarification.
    
         The request was VERY appropriate, in my opinion, in
    the DIGITAL conference, which deals informally with many
    aspects of employment at Digital (including many benefit 
    issues).  There will never be a CORPORATE_PERSONNEL 
    conference, in any case, as binding Digital personnel 
    policies are discussed in the Personnel and Policies 
    Procedures Manual (which is out-of-date on the issue).
     
                              William Ellis