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View Diary: James O'Keefe to Pay $100K Settlement to Former Acorn Employee (152 comments)

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  •  In your case, (0+ / 0-)

    the employer should fire you for charging personal items on their credit card. They're being nice if they're just adding it to your income.

    In the O'Keefe case, "should" is the operative word in your last sentence. I don't know tax law well enough to know how tax on gifts works, but even if the benefactor gave the money to O'Keefe, it would be considered a gift, not income. If paid directly to Mr. Vera, it wouldn't impact O'Keefe's filing at all.

    •  from the (0+ / 0-)
      In general, if you are liable for a debt that is canceled, forgiven, or discharged, you will receive a Form 1099-C (PDF), Cancellation of Debt, and must include the canceled amount in gross income unless you meet an exclusion or exception. If you receive a Form 1099-C but the creditor is continuing to try to collect the debt, then the debt has not been cancelled and you do not have taxable cancellation of debt income.
      There are exceptions, in particular for certain mortgage debt during the foreclosure crisis, but otherwise if someone pays a debt for you it is indeed income for you whether it passes through your hands first or not.

      They don't fire you for charging non-allowable business expenses on the corporate card; they just make you pay them. Now if you do not pay them, that's another story!

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