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the Revenue Procedures, the expenses covered by the per diem
payments are deemed substantiated in an amount equal to the
lesser of the per diem allowance for the day or the Federal M&IE
rate. See Rev. Proc. 96-28, sec. 4.02, 1996-1 C.B. at 688.
Respondent does not dispute that under the Revenue Procedures,
petitioner is deemed to have substantiated the subject expenses
in an amount equal to the full amount of the per diem payments.
Thus, respondent has effectively conceded that the subject per
diem allowances are less than the Federal M&IE rate.
Under section 6.05 of the Revenue Procedures, because the
per diem allowances are deemed paid only for M&IE, an amount
equal to the lesser of the per diem allowance or the Federal M&IE
rate is treated as an expense for food and beverages and thus
subject to the limitations of section 274(n). As just discussed,
respondent has effectively conceded that the per diem allowances
at issue here are less than the Federal M&IE rate–-a concession
to which petitioner must accede if the subject expenses are to be
deemed fully substantiated under the Revenue Procedures.
12(...continued)
lodging expenses. Petitioner disputes respondent’s factual
premises. Because the test in sec. 4.02 of the Revenue
Procedures is disjunctive, failure to meet any one of the five
enumerated requirements causes the per diem allowances to be
considered as paid only for M&IE. Because it is undisputed that
the requirement described in the text above has been met, we need
not decide whether any of the additional requirements have been
met.
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