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It is undisputed that the per diem allowances are computed
on the same basis as the drivers’ wages; i.e., on the basis of
miles driven. Hence, section 4.02 of the revenue procedures
treats the per diem allowances as being paid only for M&IE.9
Beech Trucking Co. v. Commissioner, supra at 437. Under section
4.02 of the revenue procedures, the expenses covered by the per
diem allowance 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. 96-64, sec. 4.02, 1996-2 C.B. at 428-429.
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). Beech Trucking Co.
v. Commissioner, supra at 437. For 1995, the average daily per
diem allowance paid by Continental was between $28.85 and $30.72,
which is less than the Federal M&IE rate of $32. See Rev. Proc.
94-77, sec. 4.04(2), 1994-2 C.B. at 827. For 1996, the average
daily per diem allowance was between $29.73 and $32.19, and the
Federal M&IE rate was $32. See id., see also Rev. Proc. 96-28,
9 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. Beech Trucking Co. v. Commissioner, supra at
437 n.12. 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. Id.
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