- 38 -
revenue procedure might have been arbitrary, the taxpayer failed
to substantiate any higher amount of actual automobile expenses
and so was properly granted a deduction based on the revenue
procedure), affd. 457 F.2d 369 (9th Cir. 1972).
Petitioner cites Johnson v. Commissioner, 115 T.C. 210
(2000), to support his contention that section 274(n) is
inapplicable to the extent the per diem allowances represent
reimbursements for incidental expenses.31 Petitioner’s reliance
on Johnson is misplaced. In Johnson, the taxpayer, a merchant
marine, incurred and paid incidental travel expenses that were
not reimbursed by his employer. The issue was whether, pursuant
to Rev. Proc. 96-28, 1996-1 C.B. 686, the taxpayer could deduct
these incidental expenses using the full Federal per diem rates.
Resolution of this issue in Johnson turned upon the proper
interpretation of section 4.03 of Rev. Proc. 96-28, 1996-1 C.B.
at 688, which provides an optional method whereby employees and
self-employed individuals may deduct meal and incidental expenses
incurred for travel away from home by using an amount computed at
31 Neither in the petition nor elsewhere in this litigation
has petitioner expressly sought any relief with respect to Beech
Trucking’s claimed deduction for its reimbursements of any
incidental travel expenses of its drivers. As previously
discussed, on its Federal income tax return, Beech Trucking
deducted the per diem payments under the rule of sec. 6.05 of the
Revenue Procedures, which effectively treats 60 percent of
certain per diem payments as being for lodging (and thus not
subject to the sec. 274(n) limitation) and the other 40 percent
(which would include any incidental travel expenses) as being
subject to the sec. 274(n) limitation.
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