76. Katelyn is the admissions director for Harristown University, a private, nonprofit 501(c)(3) tax-exempt, independent institution of higher learning. Katelyn’s job involves constant travel, and she accumulates more frequent travel miles than she knows what to do with. She and her husband have used these miles to travel the globe, visit family, and travel to sports events and concerts. Years ago, her husband suggested that these miles really belong to the university, because it had paid for the fares that generated them, but she dismissed him as being ridiculous. But she now donates hundreds of miles each year to her favorite charity, the Make a Wish Foundation, and wonders if perhaps she really is required to declare the value of these miles as compensation on her personal income taxes.
a. Is Katelyn being ethical by not declaring the value of the frequent flier miles as income received from her employer when she takes a charitable deduction for the donation of these miles?
b. Is the institution she works for being ethical by not reporting the value of those miles to the IRS?