CCP 04-19-2004 - Laserfiche WebLink

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In most cases, the IRS would probably consider the employer-sponsored party to be a "de minimus fringe" which would not be subject to withholding and would be excluded from the employee's gross income. See, 26 USCA Sec. 132 (a) (4). . Again, each eity council should decide whether it believes these types of employee benefits promote a public purpose and serve the best interest of the citizens of their community. With regard to the authority question, a compelling argument can be made that such expenditures are a natural incident of the employer/employee relationship and that authority for such expenditure is implied as part of the authority to hire, retain, and compensate employees. Reimbursement of Employee Meals The OSA questioned Brooklyn Park's practiee ofreimbursing eity officials for various business lunches, Relying on a 1965 Attorney General Opinion, the OSA concluded that there was no authority to support such expenditures. It is interesting to note, however, that subsequent opinions from the Attorney General have actually found that questions of this nature are "a question of fact and policy, one which the legislative body, , , is most qualified to make" Op, Atty, Gen, 285a, August 7,1969, In evaluating the validity of lunch expenses associated with a Minneapolis Library Board function, the Attomey General, quoted language from Burns v. Essling, 156 Minn. 171, 194 N.W. 404 (1923) wherein the court stated, "The mere fact that some private interest may derive ineidental benefit from an activity does not deprive the activity of its public nature if its primary purpose is public." . The Attorney General's Opinion goes on to say that the "inquiry should focus on the questions of whether the primary purpose of the luncheon was in fact to discuss planning and operations of the new branch library, and whether that discussion is properly ineidental to the Library Board's chartered function." The Opinion states, "Our courts are disposed to defer decision on these questions unless the facts show a serious abuse of diseretion." In commenting on a 1954 Opinion addressing luncheon expenses incurred by the City of Hopkins, the Attorney General stated, "it rests within the discretion of the city council, in the exercise of its sound and honest judgment, to determine whether or not the above $10,00 item was incurred for a publie purpose. . ." Moreover, in another opinion from 1958, regarding the reimbursement of expenses in attending a convention, the Attorney General stated: "Matters of this kind involve questions of fact and of policy. Our courts have indicated it is wisest to leave such matters to the reasonable discretion of those who represent the interest of the eity, i,e., its governing body." . 6