Team VADA eViews
The Digital Newsletter of Your Virginia Automobile Dealers Association
May - June 2008
You’ve probably seen many commercials for the “easy button”. Now we have the IRS “hot button.” Simply adopt a tool reimbursement plan and you may press the IRS hot button.
There are a number of vendors marketing tool reimbursement plans. They are marketed as a means to provide non-wage compensation to technicians. However, tool reimbursement plans are highly technical and very closely scrutinized by the IRS.
Before adopting any tool reimbursement plan, it is important that the dealership consult with its accountant. Be sure that your accountant agrees that that the tool reimbursement plan is a sound one and will pass muster with the IRS. If your accountant has a problem with the plan, do not adopt it.