HomeMy WebLinkAboutUNIFORM SPECIFICATIONS
UNIFORM SPECIFICATIONS:
1. Required as a condition of employment
2. Cannot be adaptable to general or continued use such that they take the place of ordinary
clothing
3. Can't be worn as ordinary clothing
Court Cases:
1. Manager of a boutique - designer fashions that she didn't wear at home because of her modest
lifestyle. Tax Court agreed, Court of Appeals disagreed
2. Locomotive fireman, a steamfitter, an operator of an oil pipe paint machine, a factory employee, a
cement worker, a telephone lineman and a common laborer could not deduct the cost of overalls.
*Protective clothing - largely allowed
*Items used to protect other clothing (overalls) - largely disallowed
Uniforms can be disallowed as a fringe benefit that is not taxable to the employee (de minimis or not)
1. Employer has a policy that the clothing be worn, but the policy isn't enforced
2. Clothing available for purchase isn't limited exclusively to clothing that's unsuitable for everyday
wear
3. An employee doesn't follow the accountable plan rules to substantiate the clothing
FRINGE BENEFITS
De Minimis clothing fringe benefit IRC 132(a)(4)
Adequate records are necessary to substantiate the fringe benefit, even if it is a tax-exempt or
governmental entity.
IRS website "De Minimis Fringe Benefits"
Considering its value and frequency with which it is provided, it is so small as to make accounting
unreasonable or impractical
Occasional or unusual
The IRS has ruled in a previous case that items with a value exceeding $100 cannot be considered
de minimus, even under unusual circumstances
Cash cannot be considered de minimus
Current Uniform Expenses:
2020 $87,068 (Through Aug 16)
2019 $154,592
2018 $133,360
2017 $115,764
RECAP AND ITEMS FOR CONSIDERATION:
Clothing has to be a condition of employment and cannot be worn as ordinary clothing
Do we need to specify what kind of boots can be purchased for Streets and Engineering?
$100 is for “de minimus”, not for “uniforms”
“De minimus” is only considered when it is infrequent and so small as to make accounting
unreasonable or impractical
Does outlining “$100 annually” in our handbook show it is infrequent or unreasonable
and impractical to account for?
EMPLOYEE HANDBOOK EXCERPT: