Originally Posted by MSPeconomist

The problem is that the IRS cares how you do this. IANAL but AFAIK if you reimburse someone for a hotel on a business trip when your employee slept on someone's couch for free or used their own points for a hotel stay, your employee has received taxable income that must be reported. It might be different if the policy is to always reimburse government per diem rates and not require receipts, but usually the per diem policy applies to meals and miscellaneous expenses, not lodging.

It could be a bigger problem if you reimburse an airfare when the employee uses miles for a ticket or takes the Greyhound bus because there isn't even a per diem for such circumstances and AFAIK USA tax law absolutely requires receipts for major transportation such as air fare.