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substantiation requirements “shall not apply in the case of an
expense which does not exceed an amount prescribed pursuant to
such regulations.”
Under section 274(n), the amount allowable as a deduction
for “any expense for food or beverages” is generally limited to
50 percent of the amount of the expense that would otherwise be
allowable. Sec. 274(n)(1)(A).
B. The Revenue Procedures
Under the applicable section 274(d) regulations, the
Commissioner is authorized to prescribe rules in pronouncements
of general applicability under which certain types of expense
allowances, including per diem allowances for ordinary and
necessary expenses of traveling away from home, will be regarded
as satisfying the substantiation requirements of section 274(d).
Sec. 1.274(d)-1, Income Tax Regs.; see also sec. 1.274-5T(j),
Temporary Income Tax Regs., 50 Fed. Reg. 46032 (Nov. 6, 1985).
For purposes of these regulations, Rev. Proc. 94-77, 1994-2 C.B.
825, and Rev. Proc. 96-28, 1996-1 C.B. 686 (hereinafter referred
to collectively as the Revenue Procedures), authorize various
nonmandatory methods that taxpayers may elect to use, in lieu of
substantiating actual expenses, for deemed substantiation of
employee lodging, meal, and incidental expenses incurred while
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Last modified: May 25, 2011