- 20 -
1996-1 C.B. 688. For 1997, the average daily per diem allowance
was $32.45, which is less than the Federal M&IE rate of $36. See
Rev. Proc. 96-64, 1996-2 C.B. at 429. Accordingly, under section
6.05 of the revenue procedures, the full amount of the per diem
payments is treated as being for food and beverages and thus
subject to the 50-percent limitation of section 274(n).10 Id.
D. Petitioners’ Contentions
As in Beech Trucking Co., petitioners argue that the revenue
procedures are invalid insofar as they operate (in section 4.02)
to characterize the per diem payments as being solely for M&IE
and (in section 6.05) to apply the section 274(n) limitations to
the full amount of the per diem payments. Petitioners do not
argue that the revenue procedures are otherwise invalid; to the
contrary, petitioners rely on section 4.01 of the revenue
procedures for deemed substantiation of the drivers’ travel
expenses and on that part of section 6.05 of the revenue
procedures that would permit Continental (absent the provision in
section 4.02 which deems the per diem payments to be solely for
M&IE) to treat 60 percent of the per diem payments as being
reimbursements of the drivers’ lodging expenses. In effect,
10 To the extent that, for 1996, $32.19 was the per diem
allowance, only $32 is treated as being for food and beverage and
thus subject to the sec. 274(n) limitation. Petitioners must
concede this because they have not otherwise substantiated the
amount that is greater than that which is deemed substantiated in
the revenue procedures.
Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 NextLast modified: May 25, 2011