- 21 -
overnight trips ($23.20 for pilots, $22 for other employees)15
was reasonable as required by Rev. Rul. 80-62, supra. Am.
Airlines, Inc. v. United States, 204 F.3d at 1111.
The evidence in the record indicates that the per diem
allowances for overnight trips (excluding meals) were for tips
for waiters, baggage handlers and drivers, transportation between
hotels and restaurants, telephone calls, personal laundry,
newspapers, and shoeshines.16 Petitioner relied on an expert
report which it claims shows that the amount of the allowances
was a reasonably accurate estimate of actual travel costs
incurred by the employees. Petitioner presented evidence that,
of the maximum $36 allowance ($37.20 for pilots for certain
portions of the years in issue) for overnight trips, between $4
and $7 was for incidental expenses. Thus, the reasonableness of
the amount of the per diem allowance for overnight trips was
based mostly on amounts attributable to the costs of meals. The
problem in the instant case is that Rev. Rul. 84-164, supra,
15Petitioner paid a per diem allowance of $1.50 per hour
($1.55 per hour for pilots for certain portions of the years in
issue) to its employees. The maximum allowance an employee was
entitled to for one 24-hour period was $36 ($37.20 for pilots for
certain portions of the years in issue). Subtracting $14 from
this maximum allowance for 1 day to account for meal expenses
leaves $22 ($23.20 for pilots for certain portions of the years
in issue) which would not be attributable to meals.
16Petitioner either directly paid, provided, or reimbursed
employees for costs of lodging, ground transportation between
airports and hotels, parking, and cleaning uniforms.
Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NextLast modified: May 25, 2011