- 44 -44
section 274(n)(1) are to be applied only to the employer as the
person who actually bears the expense, and not to the employee as
the person making the expenditure.36 Sec. 1.274-2(f)(2)(iv)(a)
and (b), Income Tax Regs.
We reject respondent’s assertions (1) that the question of
who actually bore the expense of the per diem payments involved
in Beech Trucking Co. v. Commissioner, supra, was the central
question in that case in determining whether Beech Trucking Co.,
Inc. was subject to the section 274(n)(1) limitation and
(2) that, in a three-party arrangement among a truck driver-
employee, a trucking company, and a driver-leasing company, the
person who is the employer of the truck driver will not necessar-
ily be the person who pays or incurs or actually bears the food
or beverage expenses. The parties in Beech Trucking Co. agreed
that the truck drivers in question were employees not subject to
the section 274(n)(1) limitation because of the section
274(e)(3)(A) exception and that consequently the employer of
those truck drivers was subject to the section 274(n)(1) limita-
tion. See sec. 1.274-2(f)(2)(iv)(a) and (b), Income Tax Regs.
36Where a person performs services for a nonemployer-client
under a reimbursement or other expense allowance arrangement and
the requirements of sec. 274(e)(3)(B) are met, the regulations
under the section 274(e)(3)(B) exception provide that the
limitations under, inter alia, sec. 274(n)(1) are to be applied
only to the nonemployer-client as the person who actually bears
the expense, and not to the independent contractor as the person
making the expenditure. Sec. 1.274-2(f)(2)(iv)(a), (c), Income
Tax Regs.
Page: Previous 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 NextLast modified: May 25, 2011