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individual is entitled to use the per diem rate to substantiate
only meals and incidental expenses, not lodging expense. The
Court held that a self-employed individual is not entitled to use
the per diem method to substantiate lodging expenses under
section 274(d) and disallowed the taxpayer’s lodging expenses
that were not otherwise substantiated under section 274(d). See
also Bracey v. Commissioner, T.C. Memo. 1998-254; Hoag v.
Commissioner, T.C. Memo. 1993-348.
Petitioner would have us disregard the specific language of
section 274(d) and the procedures promulgated under that section.
We cannot do so. Petitioner, as a self-employed individual, is
not entitled to use the Federal per diem rate to substantiate the
amount of his Schedule C lodging expenses. He is, however,
entitled to deduct lodging expense for the amounts substantiated
under section 274(d). Petitioner is limited to a deduction of
$5,595, which represents the actual lodging expenses that
petitioner substantiated under section 274(d).
To reflect the foregoing and the concessions of the parties,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011