Let’s start with T&E – one of the areas the IRS has announced it will focus on for extra special attention in its audits this year. To be perfectly honest, along with the rest of the accounts payable world, I was flabbergasted when I heard T&E had made the IRS hit list. But in hindsight, we shouldn’t be surprised. There have been, at least to my way of thinking, two major shifts in the way the corporate world views T&E expenditures. While there have always been organizations that took T&E seriously, many refused to enforce the policy uniformly allowing “special” employees to spend outside the policy. Here, we’ve always taken the view that this was totally unacceptable.
The enactment of the Sarbanes Oxley Act was the first wakeup call. This was documented in an Accounts Payable Now & Tomorrow survey where 57% of the respondents reported tightening up their policy as a result of the Act, although only 30% of the respondents were from public companies.
The second death knell to lackadaisical T&E enforcement came, I believe, as a result of the cratering economy. Within the last 18 months, we started to hear much discussion about “zero tolerance policies” something that was never mentioned in the past. A growing number of companies no longer have a sense of humor about inappropriate T&E expenditures. Step over the line and you may find yourself pounding the pavement.
And, now the IRS is stepping up auditing in this arena. It’s as though a new moon is rising. If you have not taken a close look at your T&E policy in recent times, now would be a good time to do so. It would also be appropriate to review the IRS guidelines to ensure your organization is complying with them. That is just one of the topics that we’ll review and discuss in our Sept. 23 webinar on T&E Best Practices to Ensure Compliance with IRS Regs and Prevent Fraud.