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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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