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The facts at hand present a challenging question because
petitioner does not fit within either of the revenue rulings.
Respondent recognizes the potential discontinuity of coverage
between the two rulings and suggests that the resolution should
be that there is no revenue ruling explicitly in force which
covers the instant case. In my opinion, the inapplicability of
Rev. Rul. 84-164, 1984-2 C.B. 63, as recognized in Murphy v.
Commissioner, supra, combined with petitioner’s failure to prove
entitlement to the deemed substantiation amount in Rev. Rul. 80-
62, 1980-1 C.B. 63, precludes the applicability of either ruling.
It follows that the allowances are not deductible by petitioner
as “travel” expenses.
The issue thus becomes whether petitioner is entitled to
deduct the per diem allowances as compensation. In this regard,
respondent’s sole argument is that petitioner is not entitled to
a deduction under section 162(a)(1) because United did not intend
to compensate its employees for personal services rendered when
it paid the employees per diem allowances. However, as noted
earlier, intent is a pertinent factor to consider, not a
prerequisite to deductibility under section 162(a)(1). As
explained previously, if the amounts paid to the employees cannot
be treated as travel expenses by petitioner, they should be
treated as compensation to the employees. In addition, the trial
judge has found that United paid the per diem allowances to the
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