Members of the governing body and staff sometimes patronize restaurants either before or after board/council meetings. If the public entity pays for the meals, at least three separate compliance issues are raised:
- There are potential Open Meeting Law issues whenever a quorum of a board/council gets together. The meeting would not be open to the public, and any discussion of matters relating to the public entity may result in an Open Meeting Law violation.
- If matters relating to the public entity are not discussed during the meals, the meals should not be reimbursed because the meal expenses are not a necessary expense and do not serve a public purpose.
- The meals may be taxable income because the board/council members and staff are not in travel status.
Whether a meal is necessary for a meeting depends upon the necessity for holding a particular meeting during mealtime rather than at some other time, and upon the benefits derived from providing food during the meeting. If a board/council meeting must be held during mealtime, we recommend that food be provided to the board/council members and staff on site, avoiding Open Meeting Law, expense reimbursement, and tax issues.
For more information on the tax issues specifically, please see IRS Publication 463 (pages 5-6) at http://www.irs.gov/pub/irs-pdf/p463.pdf, and IRS Publication 15 (Circular E) Employer’s Tax Guide (pages 12-13) at http://www.irs.gov/pub/irs-pdf/p15.pdf.
Date this Avoiding Pitfall was most recently published: 05/13/2016