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person subject to the section 274(n)(1) limitation, and that
person may or may not be the employer of the truck driver-em-
ployee. In support of such an interpretation of Beech Trucking
Co., respondent asserts:
While the Court in Beech did look to the fact that
Beech was the drivers’ common law employer, it also
looked to the fact that Beech was the party that “actu-
ally bore the expense” of the * * * per diem. * * * And
it is this latter inquiry that goes to the central
question of whether the taxpayer paid or incurred an
otherwise deductible expenditure for food or beverages
which is subject to the limitation of section 274(n).
* * *
The ultimate question under section 274(n) is
whether the taxpayer paid or incurred an expense for
food or beverages. In the case of * * * per diem paid
employees in a three-party employee leasing arrange-
ment, the party which is the common law employer and
the party which pays and incurs the food or beverage
expense will not necessarily be one and the same.
In Beech Trucking Co. v. Commissioner, 118 T.C. at 443, the
Court concluded that the section 274(n)(1) limitation applied to
Beech Trucking “as the common law employer of its drivers and as
the party that * * * actually bore the expense of the expendi-
tures for which the per diem payments were made [by the driver-
leasing company].” That conclusion is merely a restatement of
what the regulations under the section 274(e)(3)(A) exception
provide where a person performs services for an employer under a
reimbursement or other expense allowance arrangement and the
requirements of section 274(e)(3)(A) are met; namely, in such a
situation the limitations imposed by section 274(n), inter alia,
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