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In order to meet the substantiation requirement of section
1.62-2(e), Income Tax Regs., petitioner must have actually
submitted his substantiation to IMC in order to be reimbursed.
We have found above that petitioner submitted expense reports to
Mr. Kerkinni annually, and he showed Mr. Kerkinni the receipts
after each expenditure was made. Petitioner’s records were kept
carefully, and at the end of each year, he submitted an accurate
list of his expenditures. That petitioner kept Mr. Kerkinni
informed of his expenditures when they were made helps to
convince us that it was reasonable for petitioner to submit a
detailed list only annually.
C. Returning Amounts in Excess of Expenses
Section 1.62-2(f), Income Tax Regs., provides that an
arrangement meets the third requirement of an accountable plan if
the employee is required to return to the payor within a
reasonable period of time any amount paid under the arrangement
in excess of the expenses substantiated. When an employer
advances money to an employee for anticipated expenses, paragraph
(f) of section 1.62-2, Income Tax Regs., is satisfied only if the
amount of money advanced is reasonably calculated not to exceed
the amount of anticipated expenditures, the advance is made
within a reasonable period of when the expenditures are made, and
any excess of the advance over the substantiated expenses is
required to be repaid within a reasonable period after the
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