UAL Corporation and Subsidiaries - Page 19




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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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