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expenses in lieu of providing actual receipts. The purpose of
the Federal per diem rates is to ease the burden of
substantiating travel expenses away from home, not to eliminate
the requirement that those expenses be incurred before they can
be claimed as deductions from income. Although petitioners
contend that the Court has not yet addressed this issue, we
explicitly stated in Johnson v. Commissioner, supra at 227: “We
do not read the revenue procedures to allow a taxpayer to use the
full M&IE rates when he or she incurs only incidental expenses.”
In her opening statement at trial, respondent’s counsel
conceded that petitioners were entitled to incidental expense
deductions. We will not, therefore, address respondent’s
arguments in posttrial briefs challenging petitioner’s
entitlement to a deduction for incidental expenses for 2003. As
discussed above, the Federal Travel Regulations provide that a
taxpayer to whom the regulations apply and who is not reimbursed
for incidental expenses will be entitled to deduct at least the
incidental expense portion of the M&IE rate. 41 C.F.R. sec. 301-
11.18 (2002); 41 C.F.R. sec. 301-11.18 (2003).
Petitioner is entitled to a deduction for his deemed
substantiated incidental expenses for 2003 even though his meals
and lodging were provided free of charge by his employer. See
Johnson v. Commissioner, supra. Those incidental expenses shall
be calculated at $2 per diem for the months January through
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