There’s travel and then there’s travel. If employees attend a business convention in Europe, for example, you can’t reimburse their business expenses on a tax-free basis unless they demonstrate that the convention’s location satisfies heightened standards of reasonableness.
Employees who attend business conventions in North America, on the other hand, need only establish the familiar elements of the accountable plan rules for their reimbursements to be tax-free: they must document the time, place and business purpose of their trips, and submit receipts. For this purpose, North America now includes Panama. (Rev. Rul. 2011-26, IRB 2011-48)
This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/29625/irs-travel-rules-panama-canal-here-we-come