We would like to implement an accountable plan. How should I start this process and does it have to include everyone in the firm?


According to the IRS (specifically agent Rowe, #1002123), a company may have an accountable plan for some employees and a non-accountable plan for others, so you do not have to include everyone in the firm in your accountable plan.

To implement, first you will want to incorporate the rules for an accountable plan in a new T&E reimbursement policy and set of procedures. See IRS Publication 463 for definitions and rules for accountable and non-accountable plans. (Alternative link: http://www.irs.gov/pub/irs-pdf/p463.pdf)

For help with a T&E policy, see our template. Set a date when the new policy will begin. Then communicate the new policy sufficiently in advance of implementation to all affected individuals in the company. Make available a set of instructions for obtaining reimbursements under the new policy. In your communication, include benefits to the employees of the new plan (no tax liability, no expense money reported as income) to help get people on board a "new" way of doing things. Since you are making a change, it is an opportune time to consider implementing an automated T&E system. Automated systems streamline and simplify T&E reimbursements, allowing employees to file expense reports electronically even from the field, eliminating data entry by AP staff, and incorporating policies and controls.

There are a number of systems available; see T&E Software in the TAPN vendor directory. For all questions concerning tax requirements and rules, we recommend that you contact the IRS and document the answer, including agent name & number and date. This protects you by having a documented reference source at the IRS giving you their understanding of your situation, since the regulations sometimes require interpretation. You can reach a live agent for information reporting questions at (866) 455-7438.

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