Werner Per Diem fraud

Discussion in 'Report A BAD Trucking Company Here' started by LetsChangeThis, Nov 12, 2009.

  1. jtrnr1951

    jtrnr1951 Road Train Member

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  3. bigredinternational

    bigredinternational Light Load Member

    Feb 28, 2008
    omaha, ne
    You guys are killing me so I'm gonna have to jump in here.

    Lets get some background. The IRC (that's internal revenue code for you non lawyers) is enforced by the IRS (Internal Revenue Service). The IRC has historically allowed companies to deduct expenses and depreciation from taxable income because no business could survive if the IRC taxed 100% of revenue. In the trucking world a company can deduct fuel and wages as just two examples of expenses that are "fully used up" in the current accounting period. In a related deduction the IRC allows deduction of depreciation under rules called ACRS, MACRS, etc for items not "fully used up" in the year of acqusition/payment. So if you buy a truck you can't just deduct $117,000 in the year in which you buy it, instead you might use a five year recovery and choose to deduct 117,000/5 each year until your truck is "fully depreciated."

    Now how does this apply to per diem? Well, since wages are fully deductable from taxable income for the trucking company, they want to pay as much wages as possible to avoid corporate taxes. But wait. Why then don't companies just pay truck drivers all money not spent elsewhere? Ah, because they want to keep that money for themselves. Thus most companies pay their drivers as little as fair market wages require and then pay their owner/manager as high as wages as the law allows (yes there are limits but that is another topic). Thus the company's owner/manager gets the benefit of both worlds and doesn't pay double taxes (corp and individual) on the manager/owner's part of the captured revenue stream.

    Now until this thread caught my attention I had no idea that per diem was so controversial so I have not researched the relevant IRC to quote code, but I can tell you if your company does anything but the following they are manipulating you because the deduction belongs to the worker, not the company.

    Example from my last weekly paycheck as a company driver:

    Gross settlement 1604.62 minus per diem 210.00 (I don't know why we are using this number. It sounds outdated and lower than the code allows) = 1394.62. This 1394.62 is plugged into the wages tax tables just like it was your gross wages say if you were a lawyer or CPA (neither of whom incidentally) qualify for this per diem. Thus you get a total of taxes owed the various governments of 330.69. Now we go back and take our gross settlement of 1604.62 and subtract the government's share of 330.69 and presto-chango you get a take home pay check of 1273.93. That's as complicated as it gets folks. The big dogs are just making it confusing so they can pull the wool over your eyes.

    So lets sum up. Generally individual taxpayer citizens (real people) cannot deduct expenses of living from their individual tax returns like corporations/companies (fictitious persons) can. The rationale for this is that ALL of an individual's expenditures could logically be seen as expenses and thus there would be nothing left for the government to tax. Corps however intuitively have COGS (cost of goods sold) that would logically need to be deducted or else there would never be a profit. Imagine having 100 dollars revenue and 90 dollars COGS and a 20% tax rate. The company would be 10 short of paying it's tax bill if the 20% applied to revenue before deductions, and that's w/o any profit. Capitalism would cease to exist. Per diem is a statutory perk enacted by Congress to confer corporate-like tax treatment to a preferred group of individual taxpayers where they lobied hard enough and the facts appeared to make truck drivers suffer some unusual expenses that the average joe didn't have to budget for.

    Ok, so why does my company not screw it's less than 50 drivers. Because the owner is also a full time employee of the company and thus within very high limits of reasonableness, he can pay himself wages and escape the double taxation of that portion of the revenue stream that cannot be made to disappear through other pretax purchases like company cars, new trucks, new trailers, new offices, new, new, new. A profitable closely held company always has a reason to be buying stuff because if they don't they give the same money away tothe government at their marginal tax rate. Hope this clears things up. Watching the new toys roll into our office complex sometimes makes me wonder where the money all comes from, and then I remember. It is coming from the government instead of paying taxes. And it is all 100% legal!

    Last edited: Nov 22, 2009
    Jmurman Thanks this.
  4. Sad_Panda

    Sad_Panda Road Train Member

    Dec 2, 2006
    I got off the plan two weeks in, they try and force a month, but I've been free and clear for over a year now.
  5. LostSoulCA

    LostSoulCA Medium Load Member

    Apr 7, 2009
    Visalia, CA
    Is it remotely possible that the "big dogs" aren't "making it confusing" at all? Have you considered the possibilibty that language hasn't been created that will overcome:

    1. the inability to comprehend simple concepts.
    2. the inability to conduct a simple comparative analysis.
    3. the inability to differentiate subjective from objective
    4. the blindness experienced by the uninformed when the uneducated proclaim knowledge

    The funny thing is that most of the arguments have nothing at all to do with whether per diem is good or bad. The arguments are all about the fact that the company is making money off the back of the poor defenseless driver.

    The truth is, it is just easier to rant aimlessly, complaining about big companies than it is to admit that it is a wise thing to analyze your position each year and decide if per diem is right for you or if you should opt out for a year. And before you respond that "some companies don't let you opt out" look at the title of this thread.
  6. phroziac

    phroziac Road Train Member

    Jun 16, 2009
    Gary, IN
    I agree. It clearly says it charges 1cpm. Thats why I never signed it! It's a scam!

    I went to Indy, and the orientation chick was pretty clear about the charge.
  7. Caterpillar2188

    Caterpillar2188 Bobtail Member

    Jul 15, 2009
    I'm on the per diem program at werner and I like it. My co driver is not on the per diem and every week my net pay is always higher than what his is.
  8. phroziac

    phroziac Road Train Member

    Jun 16, 2009
    Gary, IN
    but it makes it look like you make less money. just look at your checkstub closely. you'll get screwed out of workmans comp if you ever get hurt on the job....and at the end of the year, he claims the per diem on his tax return at a higher rate than werner is allowed to give you...therefore he wins. Plus it's enough that it puts you to a point where you can itemize your tax return and use everything you bought for the job as deductions, whereas generally someone on per diem cant claim enough deductions to get above the standard 10,500 deduction.....

    But, heres a trick. Anyone not on per diem can get their net pay up higher by claiming more exemptions on their w4 form. You just have to be careful so you dont end up owing taxes back....
  9. chompi

    chompi Road Train Member

    Jun 21, 2008
    Deland, FL
    It is better to get money back at the end of the year than to have to pay it at the end of the year. (personal preference)
  10. phroziac

    phroziac Road Train Member

    Jun 16, 2009
    Gary, IN
    welllllll yeaaaaaah, but that doesnt have much to do with per diem...
  11. jtrnr1951

    jtrnr1951 Road Train Member

    Grab the fishing pole,

    jerk it back REAL hard.......

    That sets the hook !!!!!!!!!!!!!

    The company owns that fishing pole !!!!!!
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