- 5 - pay for such expenses. This revenue procedure also provides an optional method for employees and self- employed individuals to use in computing the deductible costs of business meal and incidental expenses paid or incurred while traveling away from home. * * * [Emphasis added.] Under Rev. Proc. 94-77, 1994-2 C.B. 825, employees and self- employed individuals are allowed to use the Federal per diem rate to substantiate business meals and incidental expenses incurred when traveling away from home. However, the use of the Federal per diem rate to substantiate the amount of lodging expenses is available only to certain employer-employee reimbursement arrangements. The procedure excludes self-employed individuals from using the Federal per diem rate to substantiate the amount of their lodging expenses. Therefore, a self-employed individual must still prove the amount of lodging costs with documentary evidence. See sec. 1.274-5T(c)(2)(iii), Temporary Income Tax Regs., 50 Fed. Reg. 46006 (Nov. 6, 1985). This Court has previously addressed the issue of whether a self-employed individual is entitled to use the Federal per diem rate to substantiate the amount of deductible lodging expenses for travel away from home under section 274(d). In Duncan v. Commissioner, T.C. Memo. 2000-269, the taxpayer, a self-employed individual, claimed deductions for lodging and meals based on the Federal per diem rate. The Commissioner disallowed the lodging expenses that were claimed for lack of substantiation under section 274(d). The Court explained that a self-employedPage: Previous 1 2 3 4 5 6 Next
Last modified: May 25, 2011