James M. and Ruth J. Riley - Page 30

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               The receipts and statements establish the dates and places             
          of the travel, and respondent’s concession that petitioner has              
          substantiated the expenses evidenced by the receipts is a                   
          concession that he was away from home conducting business on                
          those dates.  Consequently, petitioners have satisfied the                  
          requirements of section 4.03 of the revenue procedures and are              
          entitled to use the per diem method for the 33 days established             
          for 2001, the 16 days established for 2002, and the 12 days                 
          established for 2003.  Publication 1542, Per Diem Rates (For                
          Travel Within the Continental United States) (Rev. Mar. 2001,               
          Feb. 2002, and Feb. 2003), reports that the standard rate for               
          meals and incidental expenses is $30 for all years at issue.                
               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 meals and                    
          incidental expenses 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 subject to the limitation of              
          section 274(n)(1).                                                          







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