New IRS Ruling on Employer-Sponsored Home Buyout Programs

Michael F. Lynch, Bryant University
Nicholas C. Lynch, Mississippi State University

Document Type Article

Published by the New York State Society of Certified Public Accountants in The CPA JournalVolume 76, Issue 11, Pages 48-53.

Bryant University users may access this article here.


Companies doing business internationally need a global business plan that includes maintaining a mobile workforce. According to 2004 data from the Employee Relocation Council (ERC), about 1.5 million employer-assisted moves occur annually (this figure includes international and military transfers). Each year, about 450,000 domestic employer-assisted job-related relocations and about 400,000 international transfers occur. These data suggest that domestic moves are leveling off while international transfers are on the rise. Other data show that in 2003 the average cost to relocate a home-owning current employee was $70.771 and the cost to move a home-owning new hire was $52.109. The cost to relocate a current employee who does not own a home was only $19,129. and the cost to bring on hoard a renting new hire was $15,079. Thus, relocating a current home-owning employee costs about $50.000 more than relocating a renting employee.