IRS kills T&E reimbursement method … is it yours?
IRS made a big announcement this week: That it’s eliminating a major T&E reimbursement method.
Effective Oct. 1, you can kiss the high-low substantiation method good bye. The Service has announced it’s eliminating this option for employers … and soon.
Here’s what you need to know.
No new per diems for FY2012
We don’t have too many details – the IRS announcement was just a single page.
The back story: A while back, IRS asked employers to comment on the possibility of the elimination of that substantiation option. When the request was met with the sound of chirping crickets, the Taxman felt comfortable pulling the plug. And that’s just what it did.
So for FY 2012 you will no longer have a list of cities for A/P to consult for per-diems to cover lodging, meal and incidental expenses.
What will go in its place? The Service has assured that it will issue a new revenue procedure this year, covering general rules and procedures. But it also explained there will be no more yearly updates with new numbers — IRS will only issue an update if something procedural changes.
IRS has been making a lot of changes to your T&E process this summer. The end of the high-low method comes just a month after the Service decided to bump up the standard mileage rate for the remainder of 2011.
Keeping things straight
All these changes may have your employees’ – as well as your A/P staffers’ – heads spinning. And you probably will have to brace for some questions and expect some mistakes as people get used to a new way of doing things.
Of course your finance department probably has an open door policy already. But you still need some time to get work done distraction-free.
Some of your peers tell us they have luck instituting open office hours for a few hours each day, when employees can come on in (or call) with any questions they may have.
The rest of the time, direct them to A/P’s page on your company intranet or even post a frequently-asked-question list outside Finance’s office. Many just folks may get their own questions answered before they ever cross your threshold.
Does your company currently use the high-low substantiation method? What will you do now that IRS has eliminated it?
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