Which of the Following Statements Is True with Regard to the Reimbursement

question 72

Multiple Choice

Which of the following statements is true with regard to the reimbursement of employee business expenses?

• A)Reimbursements of ordinary and necessary expenses are subject to federal income tax withholding.
• B)Excess reimbursements of ordinary and necessary expenses are never subject to withholding.
• C)Reimbursements received by an employee under a plan which contains a requirement to return excess amounts, and the employee does so on a timely basis, are excluded from the definition of wages subject to withholding.
• D)Provided that reimbursements are received by an employee under a plan which requires the employee to substantiate the expenses to his employer, the amounts are excluded from the definition of wages subject to withholding, without regard to whether the employee actually substantiates the expenditures.
• E)All of these are true statements.

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Definitions:

Argument Making

The process of constructing reasons, supported by evidence, to persuade others or to explain why a particular conclusion is valid.

Application Condition

Specific circumstances or requirements that must be met for a principle, law, or procedure to be applied.

Acceptance Condition

The circumstances or criteria that must be met for a proposal, hypothesis, or solution to be considered satisfactory or acceptable.

Premises

Statements or propositions from which conclusions are drawn or reasoned.