Procedural Change for Handling Reimbursable Expenses for Consultants and Contractors
Effective for any agreements initiated after October 17, 2004, Towson University will NOT separately reimburse consultants and contractors for their expenses. For example, departments may not purchase airfare on behalf of a consultant or contractor. These types of expenses must be included in the per diem rate or the total contract amount. Payment for services rendered will only be released upon submission of a proper invoice by the consultant or contractor outlining services provided and fees charged. All invoices must be submitted directly to Accounts Payable. Miscellaneous expense vouchers will no longer be acceptable.
This change is necessary to ensure that the University complies with IRS regulations. The IRS classifies various types of payments as compensation. Consulting fees, travel expenses, royalties, honoraria, guest speaker fees, stipends, etc., are all considered compensation by the IRS. If the payment is pursuant to a service and/or if it is expected, it is taxable and must be treated as compensation.
Questions regarding this procedural change can be directed to the Financial Services Help Line at Extension 4-5599, Option 1.
Financial Services Department
Procurement Department
