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Section 274(d)(1) provides that no deduction is allowable
under sections 162 or 212 for any traveling expenses, including
meals and lodging while away from home, unless the taxpayer
complies with strict substantiation rules. In particular, the
taxpayer must substantiate the amount, time, place, and business
purpose of the expenses by adequate records or by sufficient
evidence corroborating his own statement. Sec. 274(d); sec.
1.274-5T(b)(2), (c), Temporary Income Tax Regs., 50 Fed. Reg.
46014, 46016 (Nov. 6, 1985).
Pursuant to his authority provided for in section
1.274(d)-1, Income Tax Regs., the Commissioner issued Rev. Proc.
92-17, 1992-1 C.B. 679, and Rev. Proc. 93-21, 1993-1 C.B. 529,
which provide rules under which the amount of ordinary and
necessary business expenses of an employee for lodging, meal,
and/or incidental expenses will be deemed substantiated when an
employer provides a per diem allowance under a reimbursement or
other expenses allowance arrangement to pay for such expenses.
Section 3.01 of each of the revenue procedures defines a "per
diem allowance" as:
a payment under a reimbursement or other expense
allowance arrangement that meets the requirements
specified in section 1.62-2(c)(1) of the regulations
and that is
(1) paid with respect to ordinary and
necessary business expenses incurred, or
which the * * * [employer] reasonably
anticipates will be incurred, by an employee
for lodging, meal, and/or incidental expenses
for travel away from home in connection with
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Last modified: May 25, 2011