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Per Diem Letters
Petitioner argues that TLC’s trucking company clients “were
well aware of the total amount of per diem they paid and their
responsibility to limit their deduction under Section 274(n)”
because TLC sent each trucking company client a per diem letter
for each of the taxable years at issue.
Respondent counters that TLC did not inform each trucking
company client of the section 274(n)(1) limitation prior to such
trucking company client’s entering into the exclusive lease
agreement with TLC.
We have found that the exclusive lease agreement was silent
as to (1) any per diem amounts that TLC was to pay a driver-
employee to cover such driver-employee’s food and beverage
expenses while traveling away from home and (2) the section
274(n)(1) limitation. We have also found that there were no
agreements between TLC and any trucking company client regarding
TLC’s leasing driver-employees to such trucking company client
other than the agreement set forth in the exclusive lease agree-
ment. We view the per diem letters that TLC sent to its trucking
company clients as nothing more than a self-serving attempt by
TLC to bolster petitioner’s position in the respective consoli-
dated Forms 1120 that it filed for the taxable years at issue
that the section 274(n)(1) limitation does not apply to the per
diem amounts that TLC paid to its driver-employees. In this
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