Compliance Corner: Understanding the Business Expense (BEX) Policy

Welcome back to Compliance Corner, your go-to spot for clear, practical explanations of university policies that affect your daily work. This edition focuses on the policy, a straightforward set of rules designed to keep everyone compliant while protecting you from unexpected tax bills.

A Bit of Background

The University of Colorado operates under what the IRS calls an “Accountable Plan.” In plain English, this means the university can reimburse you (or pay directly via university cards) for work-related expenses without treating the payment as wages on your paycheck.

The IRS requires clear proof that every expense was for university business. That’s where the BEX policy comes in. It applies to:

• Procurement Card (P-Card) purchases
• Travel Card and Airfare Card charges
• Cash advances
• Out-of-pocket reimbursements

The university rules have been in place for many years, with the most recent system-wide procedural statement effective January 31, 2025. The goal is simple: document the expense properly and on time so it stays non-taxable.

Why Does This Matter to You? (The “Why” in Everyday Terms)

Imagine you use your P-Card to buy supplies for a research lab. The university pays the bill because it’s official CU business.

Without timely substantiation (a clear “business purpose,” receipts where required, and repayment of any personal portion), the amount is required to be treated as additional taxable wages. That means:

• It shows up as income on your pay advice and W-2.
• You owe income taxes, Social Security, Medicare, and applicable state taxes on it, which will reduce your take-home pay.

Your Responsibilities

You must:

1. Create and submit an expense report in Concur within 90 days of the purchase date (or the end of the trip for travel-related expenses). If you have a delegate, your delegate can create the report but you must submit it yourself.
2. Clearly explain the business purpose (who, what, when, where, and why it was expended).
3. Attach required receipts.
4. Repay the university for any personal charges or unused advance funds.

Pro tip: Concur sends you (and your supervisor/delegate) reminders at 30, 60, and 75 days for transactions made on a university issued card. Don’t wait for the final notice—submit early! Creating the report or handing receipts to a delegate does not count as submission. You must hit “Submit” in Concur before the 90-day clock runs out.

Consequences of Non-Substantiation

If the 90-day deadline is missed, the expense is flagged as taxable.

If you do not meet the conditions of the university’s Accountable Plan by complying with the above procedures, you will have the amount of the related expense(s) (commercial credit card transaction, cash advance, reimbursement) reported as taxable income on your subsequent pay advice and on IRS Form W-2. This may result in decreased take-home pay in your subsequent paycheck, due to additional taxes withheld to cover the reported additional income.

If you made a demonstrable and good-faith effort to comply but experienced exceptional circumstances outside of your influence or control that prevented the expense report from being processed as non-taxable in the appropriate time, contact us right away at fiscalcompliance@colorado.edu. Forward the “Taxable Expenses Notification” email you received from Concur (with the attached list of transactions), and explain the situation. Include any documentation that will help confirm the facts. Exception requests must be received within 3 months after an expense is flagged as taxable for review. ��

We review the situation and, in rare cases, escalate your request for an exemption to the Director of Tax in the CU System Office.

Bottom Line

Timely expense substantiation keeps your business expenses tax-free and protects the integrity of the university’s Accountable Plan.

Fiscal Compliance Team
Campus Controller’s Office
fiscalcompliance@colorado.edu