No Accountable Plan Without Some Extrinsic Evidence

An accountable plan enables an employer to reimburse an employee for business expenses on a tax-free basis, with no employment tax involved. While an accountable plan does not have to be in writing, there must be some proof that a plan exists. A couple who owned an S corporation could not show any proof, such as collecting documentation to substantiate the purported expenses and the amount actually reimbursed. #IdeaoftheDay