Q: Anytime the common citizen wins a prize such as travel, they are required to claim it as income and taxes are to be paid. When a politician has a trip paid for by a constituent, PAC or other entity, is the politician required to declare it as income and to pay taxes?
—Michael Martin, Marietta
A: Mark S. Green, a spokesman for the Internal Revenue Service in Georgia, provided the explanation to Q&A on the News. A political organization is a party, committee, association, fund or other organization (whether or not incorporated), organized and operated primarily to directly or indirectly accept contributions or making expenditures for an exempt function. An exempt function is influencing or attempting to influence the selection, nomination, election or appointment of any individual to a federal, state or local public office or office in a political organization, or the election of presidential or vice presidential electors, according to the IRS. Travel, lodging, food and other expenses of a candidate and the candidate's spouse for campaign-related travel are considered to be for an exempt function. IRS regulations say that such payments, if properly substantiated, should not be included in gross income to the candidate or his/her spouse. If a campaign committee makes payments for a candidate's personal benefit that are not paid as compensation and are not treated as compensation by the organization, the amounts are not exempt function expenditures to the political organization, although they are considered to be income to the candidate, in accordance with IRS regulations.
Lori Johnston wrote this column. Do you have a question about the news? We’ll try to get the answer. Call 404-222-2002 or e-mail q&a@ajc.com (include name, phone and city).
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