The Internal Revenue Service (IRS) just reinstated the high-low substantiation method for T&E expenses — a method that was officially scrapped just last month.
As we mentioned previously, IRS had announced in the summer that, effective Oct. 1, 2011, employers could no longer use the high-low substantiation method.
However, after the T&E method was taken away, a slew of employers that relied on high-low substantiation complained.
As a result, the agency has reinstated the option.
So for trips taken after Sept. 30, 2011, travelers can use the $242 daily rate for any cities that are deemed “high-cost localities.” For other localities, the daily rate is $163.
Also, there’s one other change to let A/P know about. The daily rate for meals and incidental expenses (M&IE) can be used on its own. So, the rate for high-cost localities is set at $65, and the low-cost locality rate is $52.
To view the IRS announcement, click.