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the performance of services as an employee of
the employer,
(2) reasonably calculated not to exceed
the amount of the expenses or the anticipated
expenses, and
(3) paid at the applicable Federal per
diem rate, a flat rate or stated schedule, or
in accordance with any other Service-
specified rate or schedule. [Rev. Proc.
93-21, 1993-1 C.B. at 530; Rev. Proc. 92-17,
1992-1 C.B. at 680.]
We find that the arrangement in this case meets the
definition of "per diem allowance" provided in the Commissioner's
revenue procedures. It was reasonable for Romer to anticipate
that petitioner would incur lodging, meal, and incidental
expenses as its employee while he was away from his Tennessee
residence. It was also reasonable for Romer to estimate that the
applicable Federal per diem rate for Minneapolis would not exceed
petitioner's anticipated expenses. We find that the amount of
petitioner's traveling expenses is deemed substantiated under the
per diem allowance method.2
With respect to the time, place, and business purpose of
traveling expenses, section 1.274-5T(c)(1), Temporary Income Tax
Regs., 50 Fed. Reg. 46016 (Nov. 6, 1985), generally provides that
a taxpayer must substantiate these elements of an expenditure by
adequate records or by sufficient evidence corroborating his own
2 Since the arrangement provides for a per diem
allowance, it is treated as satisfying the sec. 1.62-2(f), Income
Tax Regs., return of excess requirement for an accountable plan.
See sec. 1.62-2(f)(2), Income Tax Regs.
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