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work to Beech Trucking’s benefit while seeking to avoid the
associated conditions that the Revenue Procedures impose.
The substantiation methods described in the Revenue
Procedures and relied upon by petitioner are not mandatory. See
Rev. Proc. 96-28, sec. 1, 1996-1 C.B. at 686. Beech Trucking
could have used actual allowable expenses if they were properly
substantiated with adequate records or other sufficient evidence.
See id.; see also Johnson v. Commissioner, 115 T.C. 210, 228
(2000).19 In that event, properly substantiated nonmeal travel
expenses might have been deductible without limitation by section
274(n). Instead, Beech Trucking elected to use the deemed
substantiation method provided by the Revenue Procedures. Having
made this election, Beech Trucking cannot avail itself of the
benefits of the Revenue Procedures without adhering to the
conditions the Commissioner has imposed. See Bob Wondries
Motors, Inc. v. Commissioner, 268 F.3d 1156, 1160-1161 (9th Cir.
2001) (taxpayers who elected, pursuant to a revenue procedure, to
19 Moreover, Beech Trucking could have avoided the sec.
274(d) substantiation requirements, as well as the sec. 274(n)
50-percent limitation, by treating the per diem payments as
compensation to the drivers. See sec. 274(e)(2) and (3),
(n)(2)(A); sec. 1.274-2(f)(2)(iii) and (iv)(b), Income Tax Regs.
The tradeoff would be that the per diem payments would then be
includable in the drivers’ gross incomes and would be subject to
withholding and payment of employment taxes when paid. See sec.
1.62-2(c)(5), (h)(2)(ii), Income Tax Regs. Under this scenario,
the drivers would be eligible to claim, as itemized deductions,
expenses attributable to the payments included in their gross
incomes, subject to the sec. 274(d) substantiation requirements
and the sec. 274(n) 50-percent limitation. See sec. 1.62-
2(c)(5), Income Tax Regs.
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