Source: https://legal.uncc.edu/policies/up-602.11
Timestamp: 2020-05-26 05:18:26
Document Index: 669599274

Matched Legal Cases: ['§ 274', '§ 274', '§132', '§61', '§132', '§132', '§132', '§132', '§274', '§1441', '§133', '§163', '§14', '§14', '§133', '§163']

This document establishes the policy and procedures related to awards and other gifts presented on behalf of the University. This Policy specifies the University funds that may be used for awards and other gifts and addresses the tax implications and reporting requirements of the awards. A summary of key points identified in the information below can be found in Threshholds for Reportable Gifts, Awards, and Prizes (Appendix A).
A. Non-Cash Gifts, Awards, and Prizes
Tangible personal property generally refers to non-cash personal property that can be physically relocated and excludes real property (land and building). Examples of tangible personal property include, but are not limited to: flowers, candy, fruit, UNC Charlotte logo items, memento items, books, pens, pennants, plaques, or similar items.
For purposes of this Policy, tangible personal property does not include cash, cash equivalents, gift cards, gift coupons, gift certificates (other than arrangements conferring only the right to select and receive tangible personal property from a limited array of such items pre-selected or pre-approved by the University), vacations, meals, lodging, tickets to theater or sporting events, stocks, bonds, other securities, and other similar items. (See IRC § 274(j)(3).)
2. Gift certificates for tangible personal property
Non- transferable gift certificates for tangible personal property are the only types of gift certificates that qualify as non-cash awards for purposes of allowable awards set forth in this section. Such gift certificates must confer only the right to select and receive tangible personal property from a limited array of such items pre-selected or pre-approved by the University, and must not convey cash or cash for the difference between the purchase price and the value of the gift certificate.
B. Cash Gifts, Awards, and Prizes
1. Gift cards: Gift cards are always considered cash, per federal tax law, for purposes of this Policy. (See IRC § 274(j)(3).) All gift cards given to employees must be reported to the Tax Office and are reportable as wages to the employee. See Gift Card/Gift Certificate Procedures.
2. Gift certificates: A gift certificate is considered cash if it does not meet the criteria listed above in section II.2.
The award and gift recipients covered by this Policy include faculty and staff employees, individuals who are not employees of the University (“non-employees”), and organizations.
The Reportable Gifts, Awards, and Prizes Documentation Form (Appendix B) is required for reportable gifts. See Appendix A for a summary of the non-reportable amounts of awards and gifts described in this policy. No formal tracking is required beyond the substantiation required for any business expense for awards and gifts that do not exceed the listed amounts. However, documentation for awards and gifts should be maintained within the unit to support distribution of the awards and gifts in the event of an audit or review unless, considering the value and the frequency with which the gifts are provided, they are so small as to make accounting for them unreasonable or impractical (See IRC §132(a)).. The Gifts, Awards, and Prizes Log Sheet (Appendix C) is recommended for the unit’s use to document the distribution of non-reportable awards and gifts.
All awards and gifts (cash and non-cash) to employees are allowable as long as the criteria in Section I.C are met (i.e., they have valid business purpose). As a general rule, these awards and gifts are taxable to the employee and must be reported to the Tax Office for tax reporting purposes. (See IRC §61(a).)
However, certain non-cash awards and gifts of tangible personal property to employees (see Section II.1 above) are not reportable to the Tax Office if they meet certain additional criteria, described in this Section IV.A (1-5) below. These criteria, as promulgated by the Internal Revenue Service (IRS), are dependent on the type of gift or award and are listed below. (See IRC §132.)
Any cash gifts to employees, regardless of the amount, are taxable and must be reported to the Tax Office.
​An item of tangible personal property may be presented to an employee in recognition of his or her noteworthy work-related accomplishments. Non-cash awards that meet all of the following requirements need not be reported to the Tax Office:
The award must be given under conditions and circumstances that don’t create significant likelihood of disguised pay;
If the above requirements are not met, the entire amount is taxable to the employee and must be reported to the Tax Office. (See IRS Publication 15-B; IRC §132(a)(4).)
2. Length of Service or Retirement
If the above requirements are not met, the entire amount is taxable to the employee and must be reported to the Tax Office. If the above requirements are met, only the amount in excess of $400 is taxable and reportable to the Tax Office. (See IRS Publication 535.)
If the above requirements are not met, the entire amount is taxable to the employee and must be reported to the Tax Office. If the above requirements are met, only the amount in excess of $400 is taxable and reportable to the Tax Office. (See IRS Publication 535.)\
Occasionally, units will provide tangible personal property as prizes and other gifts to encourage employee participation in an event or as an incentive to complete a survey or a questionnaire.If the cost or value (not including shipping and delivery costs) exceeds $100, the entire amount is taxable and must be reported to the Tax Office. (See
5. Congratulatory Gifts
Gifts of tangible personal property may be presented as an expression of congratulations, for example, in the event of a wedding or birth of a child of an employee. If the cost or value (not including shipping and delivery costs) exceeds $100, the entire amount is taxable to the employee and must be reported to the Tax Office. (See IRS Publication 15-B; IRC §132(a)(4).)
Gifts of tangible personal property may be presented as an expression of sympathy, for example, in the event of the death or major illness of an employee or a member of the employee’s family or household. If the cost or value (not including shipping and delivery costs) exceeds $200, the entire amount is taxable to the employee and must be reported to the Tax Office. Sympathy gifts of tangible personal property should be limited to items such as flowers, plant arrangements, and gift baskets. (See IRS Publication 15-B; IRC §132(a)(4).)Cash contributions for sympathy and congratulatory gifts are allowable if made to a charity in the name of the University.
B. Non-employee Awards and Gifts
1. Non-employee awards and gifts
Non-employee awards and gifts are gifts given to recipients such as donors, potential donors, visiting dignitaries and scholars, volunteers, community members, elected and appointed officials, students, and research participants, and may include the following:
an award for promotional and goodwill gifts;
gifts presented as a token of appreciation for, or in recognition of, service to the University;
gifts presented for meritorious academic achievement;
incentive gifts for completion of a survey or for participation in an event or research project; and
gifts offered as an expression of sympathy or congratulations.
2. Dual Status as Employee and Other Status
If the gift recipient has a status as both a non-employee (such as a student or volunteer) and an employee, a determination must be made as to whether the presentation of the gift is dependent on the individual’s employment relationship with the University. If the gift is not dependent in any fashion on the fact that the recipient is also employed by the University, the gift will be treated as a non-employee transaction. If the gift relates to the employee’s employment with the University, the gift will be subject to the guidance set forth in Section IV.A.
3. Cumulative Gifts
Awards and gifts (cash and non-cash), combined with other payments made to non-employees, that equal or exceed $600 per calendar year, are reportable to the IRS by the Tax Office. (See IRS Instructions for Form 1099-MISC.
4. Non-employee Awards and Gifts Reporting Guidelines
All awards and gifts (cash and non-cash) to non-employees are allowable as long as the criteria in Section I.C. are met (i.e., valid business purpose, etc.). As a rule, these awards and gifts are taxable to the recipient and must be reported to the Tax Office for tax reporting purposes. However, certain awards and gifts of tangible personal property to non-employees are not reportable to the Tax Office if they meet certain additional criteria. These criteria, as promulgated by the IRS, are dependent on the type of gift or award and are listed below. Any cash gifts to non-employees, regardless of the amount, are taxable and must be reported to the Tax Office.
A promotional item of tangible personal property may be gifted to a non-employee. If the cost or value of the promotional item gift is $600 or more, the gift must be reported to the Tax Office.
b. Appreciation, Recognition, or Incentive
A gift of tangible personal property for appreciation, recognition, or incentive may be given to a non-employee. Such gifts include student awards for a noteworthy academic achievement or an incentive gift to complete a survey or questionnaire. This category also includes gifts to volunteers for participation in a clinical study or other University activity. Door prizes and other gifts provided to non-employees to encourage participation in a University-sponsored event are also included in this category. If the cost or value of such gift is $600 or more, the gift must be reported to the Tax Office.
c. Sympathy and Congratulatory Gifts
Gifts of tangible personal property may be presented as an expression of sympathy, such as in the event of the death or major illness of an individual or a member of the individual’s family or household, or as an expression of congratulations, such as in the event of a wedding or birth of a child. The cost or value of all such gifts given to an individual is limited to less than $600 per calendar year. If the cost or value is $600 or more, the gift must be reported to the Tax Office. Cash contributions for sympathy and congratulatory gifts are allowable and non-reportable if made to a charity in the name of the University.
C. Human Subject Payments
Cash and non-cash payments are allowable for human subjects (e.g., participation in research studies) and for completion of surveys. Payments must be reported to the Tax Office in accordance with the other sections in this policy (i.e., depending on whether the payment is to an employee, non-employee, and/or nonresident alien). (See IRC §274(b).) For allowable methods of payment, see separate Human Subject Payments procedures, supplemental to this Policy.
All awards and gifts (cash and non-cash) to a nonresident alien recipient, regardless of the dollar amount, are subject to specific tax reporting requirements and must be reported to the Tax Office on the Reportable Gifts, Awards, and Prizes Documentation Form (Appendix B). (See IRC §1441.)
​E. Gifts and favors from University contractor, subcontractor, or supplier
North Carolina General Statute §133-32 prohibits contractors, subcontractors, and suppliers from making gifts or giving favors to any officer or employee of a governmental agency who has specified duties as stated in the statute. It is also unlawful for any officer or employee of a governmental agency with those specified duties to receive or accept any such gift or favor from any contractor, subcontractor or supplier. Under the statute, these specified duties are as follows:
Preparing plans, specifications, or estimates for public contracts, or
Awarding or administering public contracts, or
Contractors, subcontractors, and suppliers may donate gifts and favors to the University (not to employees) which the University will then distribute to the most appropriate individuals. The University must have complete discretion in choosing appropriate recipients for the gifts and favors received from contractors, subcontractor, and suppliers.
Once the University selects employees to receive the gifts, the tax and reporting implications of these gifts and favors would be the same as in Section IV.A above.
Note that this statute is not intended to prevent a gift a public servant would be permitted to accept under NC General Statute §163A-212, or the gift and receipt of honorariums for participating in meetings, advertising items or souvenirs of nominal value, or meals furnished at banquets. Any questions about the interpretation of GS 133-32, GS 163A-212 or other laws relating to gifts to state employees should be directed to the Office of Legal Affairs.
Discretionary Funds and Other Institutional Trust Funds (as defined in University Policy 601.8, Appropriate Use of University Funds) may be used to purchase awards and gifts as long as the spending restrictions of the fund are met. General Funds (as defined University Policy 601.8, Appropriate Use of University Funds) may be used for this purpose as long as the awards and gifts are through a Chancellor-approved program, UNC Charlotte-sanctioned program, or under the North Carolina Employee Suggestion System that is described in the North Carolina Office of State Human Resources employee handbook. The Teaching Excellence Award, state service awards, and staff appreciation celebration awards are examples of UNC Charlotte-sanctioned awards. Chancellor-approved award programs will identify an appropriate fund source.
“Raffle" means a game in which the prize is won by random drawing of the name or number of one or more persons purchasing chances.
A raffle conducted pursuant to NC General Statute §14‑309.15 is not "gambling."
A non-profit organization may hold only four raffles per calendar year.
The total cash prize (or fair market value for goods) offered in one calendar year may not exceed $250,000.
No less than ninety percent (90%) of the net proceeds of a raffle shall be used by the nonprofit organization for charitable, educational, civic, or other nonprofit purposes.
"Net proceeds of a raffle" means the receipts less the cost of prizes awarded.
The total appraised value of all real estate prizes offered by any nonprofit organization may not exceed five hundred thousand dollars ($500,000) in any calendar year.
At UNC Charlotte, a raffle held by any university unit or department counts against the four-raffle limit for the University. Prior to conducting a raffle, a university unit must consult with the Associate Vice Chancellor for Finance to ensure that the raffle is within the four-raffle per year limit and otherwise meets the criteria set forth above.
Student organizations and associated entities are not considered a university unit or department for purposes of this section.
Raffle winnings are taxable, subject to federal and state taxes, and reportable on IRS Form W-2G. Amounts greater than $5,000 are subject to withholding at the time winnings are disbursed. The unit conducting the raffle must collect the winner’s name, address, and taxpayer identification number to ensure proper reporting.
The Vice Chancellor for Business Affairs is responsible for ensuring compliance with the requirements of this policy. The Vice Chancellor for Business Affairs will ensure that this policy is updated; will provide interpretative guidance; and will report to the Chancellor, Provost, and the vice chancellors on the use of university funds as necessary. Exceptions to this policy must be approved by the Controller’s Office.
Initially approved April 14, 2015
Threshholds for Reportable Gifts, Awards, and Prizes (Appendix A)
Reportable Gifts, Awards, and Prizes Documentation Form (Appendix B)
Gifts, Awards, and Prizes Log Sheet (Appendix C)
Gift Card/Gift Certificate Procedures
NC General Statute §14‑309.15
NC General Statute §133-32
NC General Statute §163A-212