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Is this legal? I’m staffed on a long project with 1+ years remaining. I routinely expense between ~2.5k on hotels weekly. I want to buy a local property and Airbnb it to myself... continued

likefunnysmart
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If the rental is done legally (aka reporting income, maintaining your primary residence, etc.) then I don’t think it’s illegal or unethical. However, it is probably against company policy, but again, not for being illegal. Partners are extremely risk adverse to begin with and certainly in this type of situation. Perception is reality and imagine having to explain the situation to the client, even if it doesn’t impact or even improves their bottom line. There are too many potential risks and potential conflicts of inters and absolutely no need or benefit for your company to assume them or your client to okay them. Did you charge yourself market rent? What about cleaning fees? What about “surge like pricing if there is a big event in town? What do you do if you want to in lieu one weekend? Companies probably started discussing these issues when Uber blew up and drafted company policies to eliminate all the extra effort and risks that would come from these scenarios.

likesmarthelpful

Thanks for spelling this out. Perception is reality, and that’s the main reason this is a bad idea. I will not pursue the idea.

likesmart

To everyone (half this thread) saying “I don’t see anything illegal or unethical here,” it’s a conflict of interest. That means either apparent or even the appearance of a conflict of interest. Are you only taking this project because you’re staffed in that location? Are you going to stay longer because of your Airbnb? Then you and EY are not providing the best service to your client for their money because EY is staffing (or you’re choosing to be staffed) based on something that’s not at the best interest. Think about if everyone at some firm tried to pull this. That’d be a shady ass firm, and if I had to choose between that firm and another one, I definitely would not choose that firm. Thinking of it that way it feels like a developing economy damn, where all business deals are based on backdoor relationships (e.g., this partner’s staff only takes projects in x city because he owns the city block).

likesmart

? Airbnb was founded 2008.

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It is expense fraud and people have been fired for it before

likeupliftingsmartfunny

Fraud is certainly the wrong word. It is not unethical in any way. It might be against corporate policy because it is a borderline case which some people misunderstand. The IRS doesn’t care as long as revenue is recognized and taxes are paid. Look at it this way - if you owned the place and rented to a different consultant, it is clearly OK. What changes because you are the consultant?

I believe the term is “self-dealing”. It would be like being the President and using taxpayer money to stay at your own resort. No way that would fly.

likefunnyupliftingsmarthelpful

I’ve thought after key meetings: damn I could’ve done better. But I did sound better than the President. Clients don’t see it that way though.

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If you have to ask is this legal and/or ethical, you should prob ask do we have a policy against it.

likefunnysmarthelpful

BAH, PwC policy states Airbnb is out of policy. So depends on the firm

I bet they throw in a free pair of metal bracelets with your last expense report

likefunnyuplifting

OP, it’s explicitly prohibited by our Airbnb business travel booking policy.

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Update: thought I was a financial genius. Turns out I’m just ignorant of conflict of interest policy and perception. Thanks for the insight y’all

likefunny

No, you’re smart. Others are not clued in

OP a bunch of consultants got busted for this a few years back. It was a multi-firm deal where consultants rented Airbnb’s to each other in a closed community. They all got fired for expense fraud

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Snitches get snitches. Some people have been doing this long before there was AirBnB and with properties much larger than SFH.

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... I’ve run the numbers and I can pay off the entire mortgage within the year on a few target properties. Is this illegal or just savvy? It seems too good to be true to pop out of this project with a free house...

likefunny

Your creating a Tax issue for yourself. You have to report the state you did the work. The income of your property. Not to mention a big conflict of interest. The firm could see this as your second residence. Why would the firm pay you to stay At your second home? Could this be viewed dishonesty?

Also consider if you own property in a state and you work there for over a year, you’re going to become a resident of that state pretty quickly. That means you can’t expense any travel costs due to LTT. The numbers you ran don’t take this into account

like

I don’t believe the above is correct. However, I am assuming OP would maintain their current primary residence status by traveling weekly for client work and back to primary/office location. If OP able to maintain their primary residence as the home office state than your NYC/LA/Atl example isn’t relevant. If they were planning to live full time in the client state then it changes everything.

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see if you can clear with your partners? if they approve, why cant you? these kids on the board dont own shit lol partners do

likesmarthelpful

It’s also 100% tax fraud unless you are reporting it as income. You should check your policies from LTA - (long term assignment). It’s a grey are whether business travel to the same location over a year becomes taxable per IRS rules.

like

OP the problem is you’re applying rationalization of benefits instead of risk mitigation. Firms don’t give a f*ck about preventing you from financial gain. But they DEF give a f*ck about avoiding tax fraud or even the appearance of fraud generally. Especially when their reputation is the basis of future revenue. Use your head

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Ask forgiveness later? Genius

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LOL I thought about this too, genuinely. Then, things that are too good to be true are almost 99% too good to be true.

like

You expense 2.5k a week for hotels at a firm that makes you pack your lunch?

likefunny

It’s against policy in Accenture for this exact reason

like

Nobody is talking about the economic impact of a company spending money within the community. A dollar spent at a hotel goes further in the community than the dollar spent on your mortgage which once sold will take all the money out of state.

likefunny

I am not a boomer, sorry. I will be around quite a bit longer and doing perfectly well against the misdirected millennials. Keep projecting, your idealism is my advantage

Incoporate a company, become a silent investor with an alias name, buy a property though the company and get it managed through a property management company. You have created enough layers to protect yourself. Just make sure you disclose the rental income.

like

Do t do this. THIS is why people think it’s wrong. Be up front about what you’re doing. They won’t argue based on cost. Try to hide it and you artificially create the appearance of impropriety. Maybe they say no. Their loss

like

Seems pretty unethical. If I were a client I’d be pissed that I’m paying for your mortgage, I’d demand you are now local and not allowed any expenses. On top of this you’d suffer from loss of trust from client and team. At one of my previous projects a local consultant charged some tolls to get home. The clients were pissed about $10 charges because they would have to pay for those same tolls out of their own pockets, this is no different.

likesmart

Why would he/she get fired? Could put the house in a family members name until paid off...

likesmart

D1 also definitely insider trades...

likefunny

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