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Labor I petitioner did not carry its burden of proving error in
respondent’s determination in the notice that petitioner was
subject to the section 274(n)(1) limitation with respect to the
per diem amounts that TLC paid to each driver-employee. Thus,
the Court’s holding that TLC was subject to that section
274(n)(1) limitation resulted in the Court’s sustaining
respondent’s determination in the notice with respect to that
limitation. No further proceedings were, or are, appropriate in
the instant case. See Hamm v. Commissioner, supra at 940.
With respect to petitioner’s section 274(e)(3) argument,
petitioner asserts:
The computation of the allowable deduction for
food and beverage expenses is complex, but there is no
dispute about the applicable law. Section 274(a)
completely disallows deductions for certain expenses.
Section 274(n) ameliorates the total disallowance of
274(a) by allowing a 50 percent deduction for food and
beverage expenses. Section 274(e)(3) in turn provides
that “the employer” is not subject to the limitations
of Section 274, where the employee incurs the expense
in the course of performing services for another
person, such as here where the truck drivers incur
expenses while performing services for the trucking
companies. * * * The Section 274(e)(3) exception
applies only where taxpayer “accounts” for the
expenses, as required by Section 274(d). * * *
Petitioner further asserts that uncontradicted evidence
demonstrated that TLC accounted to the trucking company clients
for the per diem amounts that it paid to its driver-employees.
On the record before us, we reject petitioner’s assertion.
Petitioner first raised petitioner’s section 274(e)(3)
argument in its amended petition. However, petitioner did not
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