What do you mean by "gross up" ... giving the employee extra reimbursement to cover the taxes? As far as I know an employer isn't require to gross up moving expenses. However, there are other requirements. See IRS publication 521. You should read the whoel thing but I copied an excerpt below
" You may be reimbursed by your employer for moving expenses, some of which are
deductible expenses and some of which are not deductible. The reimbursements you
receive for the nondeductible expenses and any allowances for miscellaneous or
unspecified expenses are treated as paid under a nonaccountable plan
and are included in your income. If you are reimbursed by your employer for the
taxes you must pay (including social security and Medicare taxes) because you
have received taxable moving expense reimbursements, you must pay tax on this
reimbursement as well, and it is treated as paid under a nonaccountable plan...Your employer must withhold income tax, social security tax, and Medicare tax
from reimbursements and allowances paid to you that are included in your income."
http://www.irs.gov/publications/p521/ar02.html#en_US_publink100043419