- 14 -
deductible to the extent that they are not limited by the 50-
percent limitation of section 274(n).11 Respondent contends,
however, that Beech Trucking is not entitled to the claimed
treatment because under the Revenue Procedures the per diem
payments are treated as being made only for M&IE and not for
lodging. Accordingly, respondent contends, under section 6.05 of
the Revenue Procedures, the per diem payments are treated as
being solely for food and beverages and thus fully subject to the
50-percent limitation of section 274(n). We agree.
It is undisputed that the per diem allowances are computed
on the same basis as the drivers’ wages; i.e., on the basis of
miles dispatched according to the Rand McNally Mileage Maker.
Hence, section 4.02 of the Revenue Procedures treats the per diem
allowances as being paid only for M&IE.12 Under section 4.02 of
11 It appears that some of the per diem payments were made
with respect to trips that involved no overnight travel.
Respondent does not dispute, however, that the Revenue
Procedures, which by their terms apply with respect to expenses
incurred by an employee “while traveling away from home”, Rev.
Proc. 96-28, sec. 1, 1996-1 C.B. at 686, apply to all the per
diem payments at issue here. Consequently, we give no further
consideration to this issue. Moreover, the parties have not
raised, and we do not reach, any issue as to whether in these
circumstances the deductibility of the per diem allowances is
constrained by sec. 162(a)(2). Cf. UAL Corp. v. Commissioner,
117 T.C. 7 (2001).
12 Respondent also contends that three other factors
enumerated in sec. 4.02 of the Revenue Procedures require that
the per diem allowances be treated as solely for M&IE. In
particular, respondent contends that Beech Trucking paid its
drivers actual lodging costs, furnished its drivers lodging in
kind, and had no reasonable belief that its drivers incurred
(continued...)
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