How to avoid income on employee reimbursements
Article Abstract:
Employees can exclude reimbursements of business expenses from their gross income if the reimbursement was made under an accountable plan. Such employee reimbursements can be arranged under an accountable plan if the expenses incurred were business-related and adequately substantiated according to Section 274, and if the excess amount given to the employee to cover the verified business costs was returned to the payer. These payments are not reflected in the W-2 form and are free from employment or withholding taxes. Reporting and witholding of taxes become requirement if the reimbursed amount is more than the substantiated expenses, if the employee fails to return excess payment to the payer within a reasonable period of time, and if the reimbursements are not properly verified.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1992
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Tax matters partner not only one who can challenge IRS
Article Abstract:
Members of a partnership are assured of a tax matters partner's (TMP) relay of information regarding audits, adjustments, and the proceedings of the Tax Court as long as measures designed as checks and balances are integrated into the partnership structure. Section 6231 of the Internal Revenue Code provides for the regulations governing the TMP's functions and responsibilities in the partnership. However, disputes remain as to the partner's right to safeguard his interest in the partnership and the proceedings of the partnership audit.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1991
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