The stories of Obama appointees whose integrity had heretofore been unassailed having to file amended tax returns are now so common that I don’t find them blogworthy. Paul Caron‘s post yesterday (via Insty) on how visiting professors on sabatical from their home institutions, though, provides yet another opportunity to examine the bewildering complexity of our tax code.
He passes along an article [PDF] whose abstract helpfully notes:
A sabbatical leave and a visiting position at another university offers professors many professional and financial advantages. Among the financial advantages are often favorable taxation of the expenses incurred and income earned at the expenses earned at the visiting university. This paper discusses the tax implications of a visiting position including the rules of eligibility for traveling deductions, rules for deducting travel and transportation expenses, implications of taking a position outside of the United States, the problems caused by the Alternative Minimum Tax and other related issues. Also covered are the recorded keeping requirements and the use of the federal per diem allowances.
Re: the AMT, he includes this suggestion:
It is really important for visiting professors to negotiate well with their institutions. Insist up front that your travel expenses (to and from) and living expenses while there (rent) are “reimbursed employee business expenses” and thus excludable under Treas. Reg. § 1.62-4(c). Do NOT negotiate for a higher salary, out of which you will pay these expenses yourself (which are deductible only the exent in excess of the 2% floor under the regular tax and are not deductible at all under the AMT).
This raises at least several obvious questions. First, why in the hell does the U.S. tax code treat visiting professors differently than their cohorts earning the same salary and benefits down the hall? Second, shouldn’t your average PhD be able to file his own taxes without the advice of micro-specialists in tax law? Third, isn’t forcing people to keep elaborate records solely for the purposes of filing taxes an incredible waste of productive time?
Our tax system is simply insane.
Photo by Flickr user Cayusa under Creative Commons license.
