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allowances would be deemed substantiated up to the amounts set
forth in those rulings. Sec. 1.274-5(f), Income Tax Regs.; sec.
1.274-5T(g), Temporary Income Tax Regs., 50 Fed. Reg. 46030-46031
(Nov. 6, 1985). If the total allowance received exceeded the
amount of deductible expenses incurred by the employee, then the
excess would have to be reported as income on the employee’s tax
return. Sec. 1.274-5(f), Income Tax Regs.; sec. 1.274-5T(g),
Temporary Income Tax Regs., supra.
For the years in issue, Rev. Rul. 80-62, supra, treated $44
per day as substantiated for purposes of section 274(d) while
Rev. Rul. 84-164, supra, treated $14 per day as substantiated for
purposes of section 274(d). The determination of which ruling
applies depends on what expenses the per diem allowances are
intended to cover. A plain reading of Rev. Rul. 84-164, supra,
indicates that it applies when an allowance arrangement is
exclusively for meals. On the other hand, in Murphy v.
Commissioner, T.C. Memo. 1993-292, we held that Rev. Rul. 80-62,
supra, applied where an allowance arrangement was designed to
cover both meals and incidental expenses.
Respondent argues that Murphy v. Commissioner, supra, was
incorrectly decided.14 Respondent argues that Rev. Rul. 80-62,
14The parties agree that the issue of the appropriate ruling
to apply is limited to per diem allowances paid before Jan. 1,
1989. Rev. Proc. 89-67, 1989-2 C.B. 795 (construing Rev. Rul.
(continued...)
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