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Accountable Reimbursement Plan - Sample
Sample Draft of Fully Accountable Reimbursement Plan Resolution
The following resolution was duly adopted by the board of directors of at a regularly scheduled meeting held on a quorum being present:
WHEREAS, income tax regulations 1.162‑17 and 1.274‑5(e) provide that an employee "need not report on his tax return" expenses paid or incurred by him solely for the benefit of his employer for which he is required to account and does account to his employer and which are charged directly or indirectly to the employer; and
WHEREAS, income tax regulation 1.274.5(e) further provides that an "adequate accounting means the submission to the employer of an account book, diary, statement of expense, or similar record maintained by the employee in which the information as to each element of expenditure (amount, time and place, business purpose, and business relationship) is recorded at or near the time of the expenditure, together with supporting, documentary evidence, in a manner which conforms to all the 'adequate records' requirements" set forth in the regulation; and
Whereas, _________________________________ desires to establish a reimbursement policy pursuant to regulations 1. 162‑17 and 1.275‑5(e); be it therefore
Resolved that ___________________________________ hereby adopts a reimbursement policy pursuant to income tax regulations 1. 162‑17 and 1.275‑5 (e), upon the following terms and conditions:
1. Any minister now or hereafter employed by _____________________________________ who reports his or her federal income taxes as an employee rather than as a self‑employed person, shall be reimbursed for any ordinary and necessary business and professional expenses incurred on behalf of the church, if the following conditions are satisfied: (1) The expenses are reasonable in amount; (2) The minister documents the amount, time and place, business purpose, and business relationship of each such expense with the same kinds of documentary evidence as would be required to support a deduction of the expense on the minister's federal income tax return; and (3) The minister documents such expenses by periodically providing the
church treasurer with an accounting of such expenses, no less frequently than monthly (or at least within 60 days of such expenditure).
2. Examples of reimbursable business expenses include local transportation, overnight travel (including lodging and meals), entertainment, books and subscriptions, education, vestments, and professional dues.
3. The church shall not include in a minister's W‑2 form the amount of any business or processional expense properly substantiated and reimbursed according to the preceding paragraph, and the minister should not report the amount of any such reimbursement as income on his Form 1040.
4. Any church reimbursement that exceeds the amount of business or professional expenses properly accounted for by a minister pursuant to this reimbursement policy must be returned to the church within 90 days, and shall not be retained by the minister.
5. If, for any reason, the church's reimbursements are less than the amount of business or professional expenses properly accounted for by a minister, the church will report no part of the reimbursements on the minister's W‑2, and the minister may deduct the unreimbursed expenses as allowed by law.
6. Under no circumstances will the church reimburse a minister for business or professional expenses incurred on behalf of the church that are not properly substantiated according to this policy. Church and staff understand that this requirement is necessary to prevent our reimbursement plan from being classified as a "non-accountable" plan.
7. All receipts and other documentary evidence used by a minister to substantiate the business nature and the church shall retain amount of his business and professional expenses incurred on behalf of the church. The minister may, at his/her option, make and retain copies of such evidence.
______________________________
Signature: Secretary of the Church Council