Forced Per Diem... Theft?

The $.025 pay reduction is where the biggest hit to driver compensation takes place. This is why I really want to know how valid or invalid that "explanation" they give is. Again, there's an issue with the 20% needing to be taxed, that I don't fully understand the role of in the $.025 reduction.

Enough about that. Here's another interesting - and startling! - thing I have found so far during the course of my investigation, that I haven't seen mentioned anywhere else yet. What makes it potentially bothersome to say the least is, say you drive a whole bunch of miles like I used to be able to do before the economy tanked, and as a result, receive a lot more in per diem than $52/day. Let's say 3500 miles a week, which some of our drivers did used to actually get. That comes out to $.14 * 500 per day, or $70/day.

What the IRS seems to be saying in its literature is, if you don't return the excess per diem that you received back to your employer (yeah, right!), or have receipts to verify that you actually spent $70/day on food (yeah, right!), then, get this...and forgive me for shouting, but I think it's called for...100% OF THE PER DIEM YOU RECEIVED AUTOMATICALLY BECOMES TAXABLE! (!!!!)

Here's the quote from the IRS literature that makes me think this could actually be true:

"If a per diem allowance arrangement has no mechanism or process to determine when an allowance exceeds the amount that may be deemed substantiated and the arrangement routinely pays allowances in excess of the amount that may be deemed substantiated without requiring actual substantiation of all the expenses or repayment of the excess amount, the failure of the arrangement to treat the excess allowances as wages for employment tax purposes causes all payments made under the arrangement to be treated as made under a nonaccountable plan. See Rev. Rul. 2006-56."

If I'm not mistaken the example case they use to explain this rule involves OTR drivers who work for a trucking company. For those who don't know what a "nonaccountable plan" is, it's one where you don't get to deduct the per diem at all.

 

From what I was told the maximum the feds will allow any trucking company to give their drivers in per diem is 10 cents per mile. So how can Marten or any other company get away with offering more than that? I think this is a fair question. I, for one would hate to get audited and be told refund us the excess over 10 cents per mile. I'd be going to jail for sure at that point.

 

I can see further problems with any company and their plans.

A driver is only permitted per diem, when traveling from their tax home. The company has to document that they in fact are responsible for a tax home, or the per diem is not allowed or legal.

 

Somehow the tax home issue strikes me as being of little or no consequence in this discussion. I doubt I'd even need to show the IRS my driver logs in an audit since I use my credit card for just about every purchase I make on the road. They'd probably be willing to put two and two together and believe me when I tell them that as an OTR driver, I didn't have that Egg McMuffin from Akron FedEx'd to Nevada.

 

I met a 61-year-old driver recently at one of our terminals who is having his lawyer check into the legality of the forced per diem plan. Said he retired from the Army 20 years ago and that he has plenty of time to devote to legal proceedings.

 

Any amount the company "gives" you in per-diem affects not only your Social Security, but your Workers Comp (if you get hurt) and your unemployment (if you get laid-off).
I would rather take the full deductions myself at the end of the year and refuse to work for any company who mandates a "per-diem".
Plus, companies seem to act like they are "giving" you something when in-fact, they are TAKING from you.
My advice.....DON'T (per diem)

 

Turn them over to the IRS????
For what?
It isn't illegal.

 

Try figuring out what the IRS allows in deductions for each day you are OTR, and tell me how taking a Company sponsored per-diem is a better deal?

 

Good point. I think the 61-year-old driver I mentioned above isn't going to find anything to sue the company over.

Our company tends to lag behind the other companies a little bit when it comes to industry trends. For good things like trip scanning this is bad, but for bad things like mandatory per diem, it's good.

 

A positive attitude is a really useful thing to have in life but good luck having it change the numbers on a spreadsheet.