C Corp Paying Expenses via Personal Accounts

Any non-Tax accounting topics go here.
#1
Posts:
8
Joined:
31-Dec-2022 12:17pm
Location:
Texas
In looking at the tax law and reimbursements, have any of you experienced a c corp owner paying all expenses via their personal bank and credit cards??

We have explained that business expenses should be going through the business accounts. The owner has moved all business money to their personal account and pays contractors and all business expenses via their personal credit cards. They consider the movement of money to be a reimbursement to themselves, but the business expenses still belong to the C Corp. I have been searching for specific code references to share from the US Code and Delaware code of the implications to the owner.
 

#2
Posts:
8
Joined:
31-Dec-2022 12:17pm
Location:
Texas
Has anyone come across this?
 

#3
sjrcpa  
Posts:
6422
Joined:
23-Apr-2014 5:27pm
Location:
Maryland
No.
Is individual submitting expense reports?
 

#4
Posts:
8
Joined:
31-Dec-2022 12:17pm
Location:
Texas
No. They just have been moving money to their personal account and paying for things. They are in the process now of pulling those transactions to be recorded in the business books as expenses to the company. It seems like it's in "excess" and not sure if it is just "frowned upon" or is against code/law.
 

#5
Posts:
3670
Joined:
21-Apr-2014 11:24am
Location:
North Carolina
I’ve seen small Corp owners use a personal credit card purely for business expenses. Provided they keep receipts, I think that’s OK. However, paying expenses from a personal account that also pays personal expenses is just daft.

Consider an audit. I daresay your client would get most expenses allowed, but would the time and emotional energy spent be worth it?
 


Return to General Accounting



Who is online

Users browsing this forum: No registered users and 4 guests