Auditing
Services

Issue

While conducting an audit for a company with a substantial number of employee relocations, it came to our attention that none of the mobility expenses accounted for airfare expenditures. Upon further investigation, we discovered that transferees had been utilizing their corporate credit cards to make flight bookings, and all these charges were being consolidated under the category of "business travel expenses." This oversight led to improper reporting, resulting in hundreds of thousands of dollars that were not accurately accounted for tax purposes, thereby causing the employer and its relocating employees to fall out of tax compliance.

Orion’s Solutions

The mistake was identified after the conclusion of the tax year. To address this issue, Orion collaborated closely with the employer to meticulously review all previously recorded air travel expenses and subsequently issued corrected wage statements (W-2c) to each affected transferee. This undertaking involved substantial time and cost implications, as well as the added frustration for the transferees who had to make amendments to their tax returns. With the support of Orion, the customer has since updated its procedures. Now, all relocation-related travel must be booked using separate credit cards, and they have implemented quarterly audits of relocation expenses to ensure tax compliance well in advance of the tax year-end.