ramifications of disbursing grant funds through personal account

[Double Yu]

Dh is a researcher affiliated with an overseas institution that should be the overseeing agency handling payments to multiple recipients of individual research grants (under one umbrella project of which DH is PI). Due to challenges disbursing funds to researchers from DH's current institution overseas, there's the possibility of us "managing" the funds (by which I mean, we do the receiving/sending and the bookkeeping) through our US personal account. None of the money would be income (except a nominal 'honorarium' for me for handling the bookkeeping and which I would report to the IRS).

Will we still raise red flags? Will the IRS consider it income regardless or is there appropriate documentation we can receive from the granting institution (that is not DH's institution but is in yet another country) to indicate it's not for our personal use?

Total grant amount is around $30,000.

Thank you!

reworded for clarity

[Sibley]

I would not comingle grant money with personal money, regardless of your recordkeeping. You might get in trouble with the grantor.

[Double Yu]

The granting institution is hoping we'll do this as there's no workaround if they send the funds to my husband's institution that then won't send individual grants to researchers without MOUs from each of their institutions.

[former player]

Can you set up a separate account called the "X grant disbursement account"?

BUT you need to be sure, as a minimum, that  1) DH has in writing from his institution that they are happy with this arrangement, 2) what you are doing does not come within the legal definition of money laundering,  3) you have pre-cleared any tax implications of the arrangement. 

There may be other issues I haven't thought of.

[Double Yu]

@former player - by "pre-cleared," do you mean with the IRS?

[diapasoun]

Is there a good reason the university won't get the MOUs? Disbursing grants, even in complex situations, is part and parcel of running a university.

[Double Yu]

Well, it's China... so, factor in major delays while the university negotiates MOUs with 4 institutions - taking at least half a year for a 15 month grant-cycle. There are several layers of approval needed, from accounting office to university admin, to province, to Bank of China. And for each transfer the PI has to be present at the bank (instead of outside the province doing his research). The complexity also has to do with which language the MOUs use (legally) and translating into regional languages (linguistically diverse region). And did I mention it's China - so all it takes is one disgruntled (palm ungreased?) bureaucrat and the whole thing hangs...