If your employer gives you a fixed "allowance" for expenses, for example $200/month for "gas" , the IRS code requires that to be treated as taxable income to you. However, if they reimburse you for actual expenses (an accountable plan), that reimbursement is not taxable. The common example of an accountable plan: you submit an expense report, to your employer, for of the amount of business miles you drove and they pay you the IRS mileage rate, for those miles.
