Some entertainment expenditures cannot be reimbursed because of the nature of the event or expenditure. These unallowable expenditures are detailed below.
1. Entertainment expenses that are lavish or extravagant under the circumstances
2. Expenses that represent additional taxable income to an employee or student under IRS regulations
3. Monetary contributions to a political campaign or candidate
4. Entertainment expenses for:
a. Employee birthdays
d. Farewell gatherings (excluding retirement or an employee with at least 5 years of service)
e. The purchase of property or services for personal use or for a non-business reason
f. Expenditures using restricted funds that are not permitted under the terms governing those funds
5. When two or more employees choose to go to lunch together to continue their business as an incidental part of the meal, when the meal is reciprocal in nature or when the meeting could have been scheduled during regular business hours.
6. Business meals that are frequent or occur on a routine basis, such as light refreshments provided at weekly departmental staff meetings. This type of expenditure is treated as taxable income by the IRS.