Accountable Plan

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Accountable Plan

A plan used by a business to reimburse its employees for expenses they incur for work purposes. For example, an employee on a business trip may be required to pay for a hotel room with his/her own money and later receive a reimbursement. Under an accountable plan, the reimbursement the employee receives is not included in his/her income. Because it is not part of one's income, the reimbursement is not a tax write-off, which is why the accountable plan was devised.

Accountable Plan

A plan for reimbursing employees for expenses such as meals, entertainment, travel, and transportation incurred for business purposes on behalf of the employer. A plan is an accountable plan if the employer requires the employee to adequately account for all business expenses and to return any excess reimbursements. For employees under an accountable plan, reimbursements aren't entered on the tax return as income and the expenses aren't deductible.
References in periodicals archive ?
reimbursement arrangements called accountable plans.
2000)), the IRS concluded that tool reimbursement plans typically operated at that time did not qualify as accountable plans.
It is even more important for Section 501(c)(3) and Section 501(c)(4) organizations to look carefully at how accountable plans are administered because of Intermediate Sanctions under Internal Revenue Code Section 4958.
What are the rules for accountable plans, and how do they apply to employee expense and travel reimbursements?
62-2, which contain rules for employee reimbursement arrangements called accountable plans.
Without much success, automobile repair shops and other businesses have long sought to have such plans classified as accountable plans.
The Tax Court rejected these arguments stating wrongful termination suits were not mentioned in the shareholder agreement and settlement of the suit did not satisfy the business connection test required for accountable plans.
There are many ways to calculate per-diem rates and mileage allowances for accountable plans.
For instance, improvements among accountable plans over the past seven years in controlling high blood pressure have saved as many as 83,000 lives.
Employers and employees generally view reimbursements from accountable plans as desirable, because they have a lot to lose if reimbursements are not handled properly.
These plans must meet the rules applicable for accountable plans.
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