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future cases. The rules regarding deductibility of per diem
allowances provide for one of two options: (1) Actual
substantiation pursuant to section 274(d); or (2) deemed
substantiation pursuant to the revenue procedures. Had
petitioners not elected to be under the revenue procedures and
had they instead substantiated the nonmeal expenses in compliance
with section 274(d), petitioners would have been entitled to a
full deduction for those expenses. However, since they elected
to opt into the revenue procedures and not to substantiate these
expenses as required by section 274(d), they are restricted to
the rules under the revenue procedures.
The per diem allowance in this case was deemed to be paid as
a “meals only per diem allowance” under the test set forth in
section 4.02(5) of the revenue procedures. When a per diem
allowance is deemed paid as a “meals only per diem allowance”,
the revenue procedures provide for a 50-percent deduction of the
entire per diem allowance and do not allow for a greater
deduction when a taxpayer provides estimates regarding the
average nonmeal expenses. Indeed, the purpose of the deemed
substantiation under the revenue procedures is to avoid the need
for additional evidence and subjective interpretations and to
provide taxpayers with clear and objective tests, even if such
tests fail to mirror actual expenditures.
We also note that, for the reasons stated in Beech Trucking
Co. v. Commissioner, supra at 450-451, petitioners’ reliance on
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