118 T.C. No. 27
UNITED STATES TAX COURT
BEECH TRUCKING COMPANY, INC., ARTHUR BEECH, TAX MATTERS PERSON,
Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 16452-99. Filed May 23, 2002.
P, a trucking company, leases its drivers from an
affiliated company. P compensates the drivers at a
rate of 24 to 26 cents per mile dispatched, of which
amount 6.5 cents is designated as a per diem allowance.
R does not dispute that P’s per diem payments are
ordinary and necessary business travel expenses that
are deemed substantiated pursuant to Rev. Proc. 94-77,
1994-2 C.B. 825, and Rev. Proc. 96-28, 1996-1 C.B. 686.
Held: On the facts involved herein, P is the
common law employer of the drivers and therefore is
subject to the 50-percent limitation of sec. 274(n),
I.R.C., to the extent the per diem payments are for the
drivers’ meal expenses. Held, further, pursuant to
Rev. Proc. 94-77, supra, and Rev. Proc. 96-28, supra,
the per diem payments are treated as being for the
drivers’ meal expenses and thus are subject to the sec.
274(n), I.R.C. limitation.
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