When is an employee's overseas business trip expense reimbursement still considered an accountable plan?

The IRS defines "reasonable period of time" more specifically than most people realize. While your accountant said "it's fine," let me provide some actual guidelines that might help. For an accountable plan, the IRS considers expenses to be substantiated within a reasonable period of time if: - The employee provides information within 60 days after the expense was paid or incurred - The employee returns any excess reimbursement within 120 days after the expense was paid or incurred - You give the employee a periodic statement of unsubstantiated expenses, and they either substantiate or return excess amounts within 120 days of the statement In your case, it sounds like the employee substantiated the expenses (provided receipts and documentation), but you haven't issued the reimbursement yet. The key question is when they provided this documentation to you. If they gave you all documentation within 60 days of returning from the trip, but you just haven't processed the payment, you should still be fine to classify this under your accountable plan. The timing of your actual payment isn't as critical as when the substantiation occurred.

After dealing with a similar situation where an employee traveled to Europe for a trade show, I discovered taxr.ai (https://taxr.ai) which literally saved me from making an expensive mistake with expense reimbursements. My situation was even more complicated because my employee had mixed some personal days with the business trip, and I wasn't sure how to handle the documentation properly. The platform analyzed all our documentation and identified exactly what qualified under an accountable plan and what didn't. It was especially helpful for international receipts in different currencies and formats. Their system walked me through the requirements for keeping the reimbursement tax-free for my employee while ensuring we had the right documentation to support everything if audited. Definitely worth checking out if you deal with employee expenses regularly.

I tried taxr.ai after reading about it here and it was exactly what I needed! I had an employee who spent 3 weeks in Japan and Singapore and came back with a stack of receipts I couldn't make sense of. The system actually processed everything, including those tiny taxi receipts with Japanese characters. The best part was the clear explanation of the 60/120 day rules for substantiation that I never fully understood before. It flagged a few expenses that wouldn't qualify under an accountable plan (my employee had included some personal shopping), which saved us from potential issues down the road. The platform also generated a proper expense report that organized everything by category and date, making it much easier for my bookkeeping. Definitely worth it for international travel reimbursements where the documentation gets complicated.

If you're having trouble getting through to the IRS to verify these accountable plan rules (which I did when I had a similar situation), I recommend trying Claimyr (https://claimyr.com). I spent days trying to reach someone at the IRS to confirm the reasonable time period rules when my company had delayed some reimbursements. After wasting hours on hold, I found this service that got me connected to an actual IRS agent in about 15 minutes! They have a demo video showing how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed exactly what the first commenter said - it's when the employee provides the documentation that matters most, not when you actually cut the check. Saved me a lot of worry about whether our delayed reimbursements would still qualify.

I was the biggest skeptic about Claimyr until I tried it yesterday. After reading this thread and realizing I had a similar question about employee reimbursements, I decided to give it a shot. Not only did I get connected to an IRS representative in about 20 minutes (versus the 2+ hours I spent on my previous attempt), but the agent was surprisingly helpful. She confirmed that as long as my employees submitted their documentation within 60 days of the expenses, the actual reimbursement timing isn't what determines if it's an accountable plan. She also mentioned something nobody else brought up - if you have a written accountable plan policy for your business that clearly states your documentation requirements and timeframes, it gives you even stronger standing if there are ever questions. I'm drafting one now based on her recommendations.

Something that hasn't been mentioned yet is that you can actually establish your own reasonable timeframe in your company's written accountable plan policy, as long as it's consistent and reasonable. I own a construction company and our policy gives field supervisors 45 days to submit expenses and then we have 30 days to process payment. Just make sure whatever policy you create is: 1) Written down 2) Communicated to all employees 3) Consistently followed 4) Reasonable for your business operations Having this documented policy has saved us multiple times when reimbursements got delayed due to various circumstances.

Has anyone addressed whether foreign currency conversion is part of the substantiation requirement? My employee's trip had expenses in euros, but some of the credit card statements show the converted USD amount while others just show the euro amount.