Is this legal? (See details.)

Sure, that’s what expense accounts are for.

Yes.

Wait! I messed up! I asked both if it was legal or illegal so you have to specify which one you’re answering! My bad.

What’s legal and what’s advisable are two different things. If he is ever audited, for example, it’s going to be a pain the ass proving that either (a) he’s not hiding income he used to purchase these things, or (b) that the money he was paid back isn’t income. It also makes for messy accounting on the business’s side. And if he’s getting cashback or air mile rewards for using his card, he may in fact be guilty of receiving kickbacks.

Those were my thoughts. There is a good chance he could get audited too, because he appears to be living WAY beyond any obvious means.

Yes. This is how my company reimburses us for expenses. We pay for the item or service and submit the receipts for reimbursement. Our policy even states that we will get the reward miles as we are actually the ones doing the travelling.

I’ve done it at my job, ordering things for the job using my Amazon Prime and then putting in a voucher for it. I have not been arrested yet!

There is a very dangerous gray area when it comes to reward miles and such. IRS may want to consider them as income and levy tax on them.

It’s not illegal, it’s actually common. You just have to be sure you claim income as income.

The thing is, he’s spending thousands of dollars at a time. Wouldn’t that alert the IRS?

Very common. I’ve done it many times as well, just show the receipt.

Oops I said yes but I thought you asked it it was LEGAL! My bad. Yes. It IS legal.

I’ve been reimbursed for small things, but we’re talking about purchases of thousands of dollars a pop. I wonder if that might make the IRS suspicious.

It doesn’t make the IRS suspicious as long as the company pays for it as a business expense. The ones who will get suspicious are the auditors for the company.

My brother lived in California and worked for a law firm that had a months long mediation in Chicago. The process carried into late fall and early winter, and he had no Chicago winter clothes. His firm told him to go down to Brooks Brothers and not spend more than $1500 on a couple suits and a couple sweaters and a good overcoat. All legal and not income to my brother.

If the company is okay with it, no big deal but it is ripe for abuse and theft.

It shouldn’t make the IRS suspicious of the individual. Let’s say that you charge $1000 on your personal credit card. You are responsible for paying the CC company. The company is responsible for reimbursing you, so your income isn’t increased as they cancel each other out.