Employee Expense Reimbursements:Bulletproofing your Policies and Procedures for Accuracy and Compliance FEATURED FACULTY:

Transcription

1 Employee Expense Reimbursements:Bulletproofing your Policies and Procedures for Accuracy and Compliance FEATURED FACULTY: Mark Schwartz, Employment Tax Specialist

2 Mark Schwartz, Employment Tax Specialist Mark Schwartz is an employment tax specialist and has over 10 years of employment tax experience as an independent consultant and as a payroll tax auditor with the State of California. He has managed an audit caseload of 20 ongoing audits, from small home-based businesses to large multi-national corporations. He is expert at defining regulatory and statutory requirements from local, State and Federal government agencies; and helping the average businessperson understand what that mean to their business. He has processed weekly and bi-weekly payroll checks plus tax forms for businesses with hourly as well as exempt workers, multistate operations and a wide variety of benefits. Mr. Schwartz provides consulting services encompassing payroll processing and payroll tax issues. These include payroll tax minimization, payroll tax compliance reviews, independent contractor studies, use of electronic transfers, deductions, benefits, etc. Mark has represented both clients and the State in front of the State Appeals Board. He understands the complexities of local wage laws, unemployment and disability claims, and other wage and benefit issues affecting your employees. Mark prides himself on his outstanding customer service skills. He listens attentively to his clientele, helping them bridge the gap between the small business world and Government bureaucracy. He eagerly assists with clients needs, and feels that educating clients toward faster, accurate and more complete payroll processes provides the most value. Mark is a participating member of the American Payroll Association. He earned his BA and MBA in Finance at Santa Clara University. He has held Certified Internal Auditor and Certified Investment and Derivatives Auditor Credentials. Mark is currently pursuing a Certified Payroll Fundamentals Credential with the American Payroll Association.

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4 Rules and Requirements for Employee Expense Reimbursements Mark Schwartz, MBA Payroll Tax Consultant In Conjunction With C4CM Best Practices for Employee Expense Reimbursements-What we will cover I. Accountable versus Non Accountable Plans II. The Use of Per Diems III. Rules of Thumb General Guidelines from the IRS IV. Specific Types of Expense Reimbursements V. Best Practices for Payroll Managers VI. Case Studies 1

5 I. Accountable versus Non Accountable Plans a) General Guidelines of an Accountable Plan Reimbursements of employee business expenses made under accountable plans can be excluded from an employee's gross income and are not subject to federal employment taxes. Reimbursements made under a non-accountable plan must be included in an employee s gross income and are subject to all federal employment taxes. Reimbursements of employee business expenses made under non-accountable plans are taxable wages, even if the business expenses are otherwise deductible Reimbursements under an accountable plan must be identified either by making the payments separately from regular wage payments, or by specifically identifying the amount that is a reimbursement payment if reimbursements are combined with regular wages in a single payment. I. Accountable versus Non Accountable Plans b) What are the elements of an accountable plan? 1) The plan must have a business connection by providing advances, allowances or reimbursements for deductible business expenses that are incurred by an employee in connection with the performance of services for the employer; 2) The plan must require the employee to substantiate expenses within a reasonable time; and 3) The plan must require employees to return advances in excess of substantiated expenses within a reasonable period of time 2

6 I. Accountable versus Non Accountable Plans b) Elements of an accountable plan 1) Business connection evidence A written statement of business purpose should be included in the diary or expense account record. But, when the business purpose is obvious from the surrounding facts and circumstances, such as sales representative s calling on customers on an established sales route, a written statement is not necessary. I. Accountable versus Non Accountable Plans b) Elements of an accountable plan 2) Substantiation of reimbursed expenses (cont ): This requirement is met by submitting sufficient information to enable the employer to identify the specific business nature of each expense and to conclude that the expense is attributable to business activities Each element of an expenditure or use must be substantiated An employee cannot lump expenses under one category such as travel. They must be detailed 3

7 I. Accountable versus Non Accountable Plans b) Elements of an accountable plan 2) Substantiation of reimbursed expenses (cont ): Documentation: An employee may substantiate business expenses by furnishing the employer with documentary evidence such as receipts. Under the "adequate accounting" rules, employers must maintain the documentary evidence and produce it if requested by the IRS Employers may take a deduction on business expenditures of $75 or more only if it is substantiated by receipts or other documentary evidence I. Accountable versus Non Accountable Plans b) Elements of an accountable plan: 3) Reasonable period of time to return excess advance there are two methods, the Fixed Date Method and the Periodic Method: Under the fixed date method, the reasonable amount of time requirement is met if: an advance is made within 30 days of the date an expense is incurred; the employee substantiates an expense to the payer within 60 days after it was paid or incurred; or the employee returns to the payer any excess amount within 120 days after an expense was paid or incurred 4

8 I. Accountable versus Non Accountable Plans b) Elements of an accountable plan: 3) Reasonable period of time to return excess advance Under the periodic statement method, the reasonable period of time requirement is met if: The payer provides the employee with a periodic statement, at least quarterly, that states the amount paid under the expense allowance arrangement in excess of the expenses the employee has substantiated to the payer; and The payer requests the employee to substantiate the excess expenses or return any amounts remaining within 120 days of issuance of the statement I. Accountable versus Non Accountable Plans c) Advances for reimbursement must match anticipated expenses When money is advanced under an accountable plan, the requirement that excess amounts be returned will be satisfied if the advance: 1) is reasonably calculated not to exceed the amount of anticipated expenditures; 2) is made within a reasonable period of time before the expenses are incurred; and 3) requires the return of any excess over substantiated expenses within a reasonable time period after the advance is received 5

9 I. Accountable versus Non Accountable Plans d) Electronic receipts are acceptable The IRS has ruled that an employer's expense reimbursement arrangement for deductible travel and entertainment expenses, which included new procedures for the use of electronic receipts and expense reports, qualified as an accountable plan I. Accountable versus Non Accountable Plans e) Employment Tax Treatment Employers may add any excess reimbursement payments that are subject to federal income tax withholding to an employee's regular wages for a payroll period and compute the tax to withhold based on that total Alternatively, employers may withhold income tax from the reimbursement at the flat 25% rate applicable to supplemental wages if the reimbursement or allowance is paid separately or separately noted if wages and reimbursements are combined 6

10 II. The Use of Per Diems Per diem allowances may be used as an alternative to employee statements to substantiate travel expenses Per diem allowances paid from an accountable plan are not subject to FICA, FUTA, or federal income tax withholding If the per diem rates are used, employees only have to account for time place and business purpose of travel II. The Use of Per Diems Under the per diem allowance method, the amount that is deemed substantiated is equal to the lesser of the actual per diem rate established by an employer for a locality or the amount computed under the federal per diem rate for the locality of travel for the period the employee is away from home The federal per diem rate is equal to the federal lodging expense rate plus the federal meals and incidental expense rate for the locality of travel If the employer's per diem rate exceeds the federal per diem rate, the employee must substantiate expenses in excess of the federal rate or the unsubstantiated income will be treated as income 7

11 III. Rules of Thumb A. Employer vs Employee benefit If the expense was for the employer s convenience, it is generally reimbursable to the worker without being taxed. If the expense is for the worker s benefit, it is generally income to the worker, hence taxable for payroll taxes. B. In the course of business If the expense is ordinary and necessary for your business, and the worker incurs the expense, it is generally reimbursable without being taxed. You must be able to explain this business need if audited. C. Reasonable vs Extravagant If the expense is prudent and within reasonable price limits, and b) applies, the full amount will generally be non-taxable. If the expense is considered extravagant for the business circumstances, whole or part of the cost will be considered taxable. D. Fair Market Value is what is used to determine the value of an expense. No discounts should be applied. E. Documentation: The IRS has eased the rules on paper documentation. However sometimes it is still required and must be produced upon request. IV. SPECIFIC TYPES OF EXPENSES a) Pre-Employment Expenses: Reimbursement for pre-employment expenses are not wages Allowances or reimbursements made to individuals by a prospective employer for expenses, such as transportation, meals, and lodging, incurred in connection with interviews for possible employment are not includible in the prospect's gross income and do not constitute remuneration for services rendered Therefore, such amounts are not subject to federal income tax withholding, and they are not taxable wages for FICA or FUTA purposes 8

12 IV. SPECIFIC TYPES OF EXPENSES a) Pre-Employment Expenses (cont ): Reimbursement of agency fees after employment is wages If an employee pays an employment agency fee, but is reimbursed for the fee by the employer after completing a specified period of satisfactory service, the reimbursement is in the nature of a bonus and is part of the wage structure of the contract of employment Since it is paid in consideration for services rendered, the reimbursement is wages for purposes of FICA, FUTA, and federal income tax withholding IV. SPECIFIC TYPES OF EXPENSES b) Meals and Entertainment Reimbursements or advances for business meals and entertainment expenses, if substantiated, are not considered wages subject to employment taxes despite the Code's deduction disallowance to the employer of 50% of the reimbursement taxpayer must substantiate by adequate records or sufficient evidence corroborating the taxpayer s own statement the following elements: Amount, Date, Name and Address of place, type of entertainment of meal, business purpose and BENEFIT TO BE GAINED, business relationship with persons at meal or event (name, title, occupation), Presence of taxpayer at meal or event 9

13 IV. SPECIFIC TYPES OF EXPENSES c) Uniform Allowances Reimbursements or advances for uniforms are not taxable if the clothes are not adaptable to street wear or cannot be worn as ordinary clothing. Think in terms of uniforms. If such outfits would not be ordinarily seen outside of the job, they are reimbursable without being income to the worker. Conversely, even if the clothes are mandatory under your company rules, such as jeans and shirts for laborers, if the clothes are normally seen outside the job, reimbursement will be taxable for employment taxes. However, if the clothing bears a company logo or otherwise is special and unique to the job, and you require your workers to wear it, either you must provide it or reimburse workers for the cost. This will be non-taxable. The FLSA does not allow uniforms, or other items which are considered to be primarily for the benefit or convenience of the employer, to be included as wages. Thus, an employer may not take credit for such items in meeting his/her obligations toward paying the minimum wage or overtime. IV. SPECIFIC TYPES OF EXPENSES d) Automobile Travel Can be with a company car or with an employee s personal vehicle. Keep in mind the rules of thumb in determining whether the personal car travel is reimbursable to the worker. For personal use of company car, if employees are allowed to use it for personal reasons, the value of that use must be reported and taxed. The Fair market value is determined as the ANNUAL LEASE VALUE. See IRS publication 15-b for details. For instances where the worker uses his/her car for company use, can reimburse with standard mileage rates or other methods. This will not be taxed. See IRS publication 15-b for details. Don t forget compensable time during travel. There are rules governing what travel time is considered commute, lunch or other personal travel. Reimbursement for expenses during this time will be taxable. 10

14 IV. SPECIFIC TYPES OF EXPENSES e) Other Personal Property of the Employee The rules of thumb apply. The rules about accountable plans apply Remember if they use their stuff for your benefit, you must use the fair market value to determine it s value. Reimbursement at or below FMV will be considered nontaxable. Anything over it will be taxable. The FLSA does not allow uniforms, or other items which are considered to be primarily for the benefit or convenience of the employer, to be included as wages. Thus, an employer may not take credit for such items in meeting his/her obligations toward paying the minimum wage or overtime. IV. SPECIFIC TYPES OF EXPENSES e) Other Personal Property of the Employee (cont) Some examples of items which would be considered to be for the benefit or convenience of the employer are tools used in the employee's work, damages to the employer's property by the employee or any other individuals, financial losses due to clients/customers not paying bills, and theft of the employer's property by the employee or other individuals. Employees may not be required to pay for any of the cost of such items if, by so doing, their wages would be reduced below the required minimum wage or overtime compensation. This is true even if an economic loss suffered by the employer is due to the employee's negligence. Employers may not avoid FLSA minimum wage and overtime requirements by having the employee reimburse the employer in cash for the cost of such items in lieu of deducting the cost from the employee's wages. 11

15 V. BEST PRACTICES a) Accounts Payable vs payroll dept communication Accounts Payable Has to be aware of compensation versus expense Relocation/moving is always an issue The use of third party relocation companies Travel expense reimbursement What is excess per diem How does Accounts Payable communicate compensation items to Payroll V. BEST PRACTICES a) Accounts Payable vs Payroll Dept communication (cont ) Payroll Dept Is Payroll aware of all employees paid through AP? Once Payroll receives notification that payments have been made, how do you handle compensation items Gross up amount reimbursed is grossed up, taxes are calculated and put on pay stub same as regular pay Employee pays tax 12

16 V. BEST PRACTICES a) Accounts Payable vs Payroll Dept communication (cont ) AP payment could require Payroll sign off Centralized approval of employee payments/reimbursements Payroll could handle actual payment after all department approvals have been obtained V. BEST PRACTICES b) Credit Card Reimbursement Policy With personal or corporate credit cards, the accountable plan rules apply. If an employee books travel over 30 days before the travel, and the employer pays it prior to the 30 days, it can be considered taxable. If an employee uses a corporate card, and does not substantiate expenses within the 60 days, it can be considered taxable. Don t forget the documentation If a person uses his/her credit card, documentation must show the business purpose, date, amount, etc.. 13

17 V. BEST PRACTICES c) Reimbursement Policy It is wise for employers to have a sound and defensible policy on expense reimbursement. Some common sense and not-socommon sense things to keep in mind are: 1) Make it a project budget time and resources for all who have a stake in it. One person should take ownership. They should get input (even a company wide ) from all who may submit expense claims or otherwise receive reimbursement V. BEST PRACTICES c) Reimbursement Policy (cont) 2) The Policy should not: i) Seem like it differs among like people. Executives will likely be entitled to more types of reimbursement than line staff, but as long as the policy refers to titles/depts, etc, hard feelings will be avoided. ii) Be excessively burdensome in its recordkeeping, logistical or spending policy. iii) Be ignored for certain individuals. Others will find out, and your policy and reputation will suffet 14

18 V. BEST PRACTICES c) Reimbursement Policy (cont) 3) The Policy should: i) Avoid payroll and H/R related acronyms, terminology, etc. ii) Allow workers lee-way in making decisions. Some will spend more, some less, allow for differences and set limits. iii) Allow for differences in geographical location iv) Be easily acceptable to workers who need it. v) Be clear on what will be allowed, what won t. Audits of claims should be done against the policy. vi) Be automated to the extent possible. Timeframes should be spelled out along with paperwork and approval requirements. vii) People need humans to explain things, sometimes even very simple things. Have someone available to take questions. V. BEST PRACTICES c) Reimbursement Policy (cont) An Example Expense Policy Template: At its simplest, an expense policy should cover the following categories: 1. Statement of purpose 2. Company expectations and policy compliance 3. Areas of ambiguity 4. Subject areas: a. travel b. travel-related expenses c. accommodation d. food & entertainment e. other expense types Further details on policy inclusion can be forwarded with an request. 15

19 V. BEST PRACTICES c) Reimbursement Policy (cont) An Example Expense Policy Template: At its simplest, an expense policy should cover the following categories: 1. Statement of purpose 2. Company expectations and policy compliance 3. Areas of ambiguity 4. Subject areas: a. travel b. travel-related expenses c. accommodation d. food & entertainment e. other expense types Further details on policy inclusion can be forwarded with an request. V. BEST PRACTICES d) State vs Federal rules Places where states can differ: 1) Travel Per Diems 2) Paid time requirements 3) Treating expense reimbursements as wages Check with your state Dept of Labor affiliates. Also check the APA website with State resource links. 16

20 V. BEST PRACTICES f) Employee Fraud The two primary schemes perpetrated are employees claiming reimbursement for fictitious expenses or inflating actual business expenses. Examples of fictitious expenses that have been known to appear on expense reports include: Charging for items used for personal reasons (gas, groceries, hotels, etc.) Billing for travel and expenses that never materialized (canceled airline tickets, seminar or convention registration fees, tuition reimbursement and professional dues payments) Seeking reimbursement for items that were never purchased (office supplies, gifts for clients) Collusion among employees who both bill separately for travel or mileage reimbursement when they traveled together Outright falsifying or manipulating receipts V. BEST PRACTICES f) Employee Fraud (cont ) Inflating business expenses can be found when employees: Claim meals and entertainment reimbursement that may be in excess of allowed per diems or items not reimbursable under your policy (alcohol, leisure activities, sports tickets). Add tips to reimbursement when tips were already included. Add tips to their reimbursement copies that were greater than what was actually left. Fly first class or use limousines when modest means may be available and more applicable. Use inflated mileage totals when seeking reimbursement for auto travel. The Association of Certified Fraud Examiners reported in its 2012 Report to the Nations on Occupational Fraud and Abuse that approximately 14.5% of all asset misappropriations investigated involved expense reimbursement fraud. 17

21 VI. Case Studies Case #1 Employer A, a company contracting with cable providers, employs technicians to install cable television systems at residential locations on behalf of different cable providers. Employee technicians are required to provide the tools and equipment necessary to complete the various installation jobs to which they are assigned. Employer A compensates its employees on an hourly basis, which takes into account the fact that technicians are required to provide their own tools and equipment. Employer A decides to begin reimbursing its technicians for their tool and equipment expenses through a tool reimbursement arrangement (tool plan). Under Employer A's tool plan, a technician provides Employer A with an amount equivalent to the technician's tool and equipment expenses incurred in connection with providing services to Employer A. V. Case Studies Case #1 (cont ) Employer A takes the technician's total expenses for the year and divides the total amount by the number of hours a technician is expected to work over the course of a year to arrive at an hourly tool rate. Once Employer A has determined the hourly tool rate amount for a technician, it pays the technician a reduced hourly compensation rate and an hourly tool rate. Employer A treats the reduced hourly compensation as taxable wages. Employer A treats the hourly tool rate as a nontaxable reimbursement. The hourly tool rate plus the reduced hourly compensation rate approximately equal the pre-tool plan compensation rate. The tool plan tracks the hourly tool rate up to the amount of substantiated tool and equipment expenses. Once a technician has received tool plan payments for the total amount of his or her tool and equipment expenses, Employer A ceases paying the technician an hourly tool rate but increases the technician's hourly compensation to the pre-tool plan hourly compensation rate. 18

22 V. Case Studies Case #1 Resolution: Employer A's tool plan does not satisfy the business connection requirement of the accountable plan rules because the employer pays the same gross amount to a technician regardless of whether the technician incurs (or is reasonably expected to incur) expenses related to Employer A's business. Specifically, Employer A's tool plan ensures that a technician receives approximately the same gross hourly amount by substituting a portion of what was paid as taxable wages with a tool rate amount that is treated as nontaxable reimbursement, and then increasing the wages again once all tool expenses have been reimbursed. Accordingly, the purported tool reimbursements are merely a recharacterization of wages because approximately the same amount is paid in all circumstances. The fact that a technician actually incurs a deductible expense in connection with employment does not cure the incidence of wage recharacterization. The arrangement fails to satisfy the business connection requirement of (d). Therefore, without regard to whether it meets the other requirements of an accountable plan as set forth in , Employer A's tool plan is not an accountable plan under 62(c) and the applicable regulations. V. Case Studies Case #2: Employer B, a staffing contractor, employs nurses and provides their services to hospitals throughout the country for short-term assignments. Employer B compensates all of the nurses on an hourly basis and the hourly compensation amount does not vary depending on whether the hospital is located away from the assigned nurse's tax home. When Employer B sends nurses on assignment to hospitals that require them to travel away from their tax home and incur deductible expenses in connection with Employer B's business, Employer B treats a portion of the nurses' hourly compensation as a nontaxable per diem allowance for lodging, meals, and incidental expenses under Employer B's per diem plan; Employer B treats the remaining portion of the nurses' hourly compensation as taxable wages. When Employer B sends the nurses on assignment to hospitals within commuting distance of their tax home, Employer B treats all of the nurses' compensation as taxable wages. In each case, the nurses receive the same total compensation per hour. 19

23 V. Case Studies Case #2 Resolution: Employer B's per diem plan does not satisfy the business connection requirement of the accountable plan rules because Employer B pays the same gross amount to nurses regardless of whether the nurses incur (or are reasonably expected to incur) travel expenses related to Employer B's business. Specifically, Employer B pays the same gross compensation to nurses, but a portion of the hourly compensation is treated as nontaxable per diem when a nurse is traveling away from his or her tax home on assignment. For nurses traveling away from their tax home on assignment, Employer B reduces the amount of the nurses' compensation treated as taxable wages and treats an amount equal to the reduction in compensation as a nontaxable per diem. For nurses assigned to hospitals within commuting distance of their tax homes, Employer B treats all compensation as taxable wages. V. Case Studies Case #2 Resolution (cont ): Accordingly, the purported per diem payments are merely recharacterized wages because nurses receive the same gross compensation per hour regardless of whether travel expenses are incurred (or are reasonably expected to be incurred). The fact that a nurse traveling away from his or her tax home actually incurs a deductible expense in connection with employment does not cure the incidence of wage recharacterization. The arrangement fails to satisfy the business connection requirement of (d). Therefore, without regard to whether it meets the other requirements of an accountable plan as set forth in , Employer B's per diem plan is not an accountable plan under 62(c) and the applicable regulations. 20

24 V. Case Studies Case #3 Employer C, a construction firm, employs workers to build commercial buildings throughout a major metropolitan area. As part of their duties, some of Employer C's workers are required to travel between construction sites or otherwise use their personal vehicles for business purposes. These workers incur deductible business expenses in operating their personal vehicles in connection with their employment with Employer C. Employer C compensates all of its workers for their services on an hourly basis, which Employer C treats as taxable wages. Employer C also pays all of its workers, including those who are not required to travel or otherwise use their personal vehicles for Employer C's business, a flat amount per pay period that Employer C treats as a nontaxable mileage reimbursement. V. Case Studies Case #3 (resolution) Employer C's mileage reimbursement plan does not satisfy the business connection requirement of the accountable plan rules because it operates to routinely pay an amount as a mileage reimbursement to workers who have not incurred (and are not reasonably expected to incur) deductible business expenses in connection with Employer C's business. The purported mileage reimbursement is merely recharacterized wages because all workers receive an amount as a mileage reimbursement regardless of whether they incur (or are reasonably expected to incur) mileage expenses. The arrangement fails to satisfy the business connection requirement of (d). Therefore, without regard to whether it meets the other requirements of an accountable plan as set forth in , Employer C's mileage reimbursement plan is not an accountable plan under 62(c) and the applicable regulations. 21

25 V. Case Studies Case #4 Employer D, a cleaning services company, employs cleaning professionals to perform house cleaning services for Employer D's clients. Employee cleaning professionals are required to provide the cleaning products and equipment necessary to complete the cleaning service jobs to which they are assigned. Employer D compensates its employees on an hourly basis, which takes into account that employees are required to provide their own cleaning products and equipment. Employer D decides to begin reimbursing its employees for their cleaning and equipment expenses through a reimbursement arrangement. Employer D prospectively alters its compensation structure by reducing the hourly compensation paid to all employees. Under Employer D's new reimbursement arrangement, employees can substantiate to Employer D the actual amount of deductible expenses incurred in purchasing their cleaning products and equipment in connection with performing services for Employer D. V. Case Studies Case #4 (cont ) Employer D reimburses its employees for substantiated expenses incurred in performing services for Employer D. Any reimbursement paid under Employer D's reimbursement arrangement is paid in addition to the hourly compensation paid for the employees' services. Employees who do not incur expenses for cleaning products and equipment in connection with their jobs for Employer D, or who do not properly substantiate such expenses to Employer D, continue to receive the lower hourly compensation and do not receive any reimbursement and are not compensated in another way (for example, with a bonus) to substitute for the reduction in the hourly compensation. Employer D treats the hourly compensation as taxable wages. Employer D treats reimbursements for cleaning and equipment expenses as nontaxable reimbursements. 22

26 V. Case Studies Case #4 resolution Employer D's reimbursement arrangement satisfies the business connection requirement of the accountable plan rules. Employer D's plan only reimburses employees when a deductible business expense has been incurred in connection with performing services for Employer D and the reimbursement is not in lieu of wages that the employees would otherwise receive. Although Employer D has reduced the amount of compensation it pays all of its employees, the reduction in compensation is a substantive change in Employer D's compensation structure. Under Employer D's arrangement, reimbursement amounts are not guaranteed and employees who do not incur expenses in connection with Employer D's business, or who do not properly substantiate such expenses, continue to receive the reduced hourly compensation amount. V. Case Studies Case #4 resolution (cont ) These employees do not receive any reimbursement and are not compensated in another way to make up for the reduction in the hourly compensation. Employer D's reimbursement arrangement does not operate to pay the same or a substantially similar gross amount to an employee regardless of whether the employee incurs (or is reasonably expected to incur) expenses related to Employer D's business. The reimbursement is paid in addition to the employees' wages rather than as a substitute for wages that would otherwise be paid. Accordingly, Employer D's reimbursement arrangement satisfies the business connection requirement of (d). Therefore, as long as the substantiation and return of excess amounts requirements are also met, Employer D's reimbursement arrangement is an accountable plan under 62(c) and the applicable regulations. 23

27 SUPPLEMENTAL MATERIAL By sending me an at or via phone request at I will forward the following items with further details on topics covered in this Seminar. 1) IRS Publication 535 Ch 11: Employer s Tax Guide to Expense Reimbursements. This explains the rules on many expense reimbursements. 2) Expense reimbursement fraud: ten ways to protect your organization. 3) GUIDE TO EMPLOYEE TRAVEL EXPENSE REIMBURSEMENT From the Associated General Contractors of America 4) Taking the pain out of employee expense reimbursement: A sample expense policy template for you to use from CONCUR THANKS FOR ATTENDING THE SEMINAR. REMEMBER I WILL ANSWER QUESTIONS IF YOU HAVE THEM, ANYTIME! AND, 1 HR FREE OF CONSULTATION ON ANY PAYROLL TAX TOPIC! MARK SCHWARTZ- MS PAYROLL [email protected] 24