Even Though IRS Executives Do Not Know It, Employee Travel Reimbursements Can be Taxable
On Tuesday, February 18, 2014, the Treasury Inspector General for Tax Administration (TIGTA) issued a report reviewing the long-term travel of certain IRS executives and found that nine of the thirty one executives whose records they studied made mistakes on their taxes. The mistakes pertained to the taxability of travel reimbursements they received. The IRS was found to have failed to apply its own rules to long-term taxable travel of its executives. As a result, the IRS failed to withhold the appropriate amount of taxes on the travel reimbursements to these executives, and the executives failed to pay the correct tax. The issuance of the report is a wonderful time to remind taxpayers that not all business travel related reimbursements are tax free or deductible for self-employed taxpayers.