- 23 - As a general rule, this Court will not consider issues raised for the first time on brief where surprise and prejudice are found to exist. Fox Chevrolet, Inc. v. Commissioner, 76 T.C. 708, 735 (1981). Petitioner was not surprised or prejudiced. The revenue procedures petitioner relied upon, as discussed above, clearly state that section 274(n)(1) reduces the allowable Federal M&IE rate by 50 percent. Furthermore, petitioner raised in his pretrial memorandum and opening brief the issue that “If the taxpayer was ‘away from home,’ what amount is allowable as a travel deduction?” Accordingly, this Court finds petitioner was not surprised and prejudiced by respondent’s posttrial contentions in this regard. Section 274(n)(1)(A) provides that the amount allowable as a deduction for “any expense for food or beverages” is generally limited to 50-percent of the amount of the expense that would otherwise be allowable. The revenue procedures provide rules for applying the section 274(n)(1) 50-percent limitation to per diem allowances. Under section 6.05(1) of the revenue procedures, a taxpayer who computes the amount of his or her M&IE under section 4.03 of the revenue procedures is required to treat that amount as an expense for food and beverages. The expenses are thus subjected to section 274(n)(1). Petitioner incurred food or beverage and incidental expenses while traveling away from home for business during the years at issue. Petitioner also computed and substantiated his M&IE underPage: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
Last modified: May 25, 2011