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To view or print the PDF content on this page, download the free Adobe® Acrobat® Reader®. August 3, 2005 Treasury and the IRS Issue Guidance on Employee-Owned Tools The new revenue ruling clarifies that employers using accountable plans to reimburse employees for the cost of providing tools must substantiate the expenses reimbursed and, to the extent the plan provides payments before expenses are incurred, the plan requires the employee to return amounts in excess of the substantiated expenses. In particular, the ruling clarifies that an accountable plan may not use estimates to substantiate the amount of the expenses. In addition to the ruling, Treasury and the IRS are issuing a notice regarding criteria for considering proposals involving employer reimbursements of equipment expenses for the Service's Industry Issue Resolution (IIR) program. The notice identifies factors that would be considered in determining that the existing accountable plan rules are unworkable for an industry and thus relief may be appropriate. The notice also states that the mere cost of collecting records, substantiating expenses, and reconciling the expenses against reimbursements would not constitute grounds for relief from the requirements of the accountable plan rules. The revenue ruling and the notice are attached. #### REPORTS |
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