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Section 274(d) generally disallows any deduction under section
162 for, among other things, “any traveling expense (including
meals and lodging while away from home)” unless the taxpayer
complies with stringent substantiation requirements as to the
amount, time and place, and business purpose of the expense.
Sec. 274(d)(1). Section 274(d) authorizes the Secretary to
provide by regulations that some or all of these substantiation
requirements “shall not apply in the case of an expense which
does not exceed an amount prescribed pursuant to such
regulations.”
Under the applicable section 274 regulations, the
Commissioner is authorized to prescribe rules under which
optional methods of computing expenses, including per diem
allowances for ordinary and necessary expenses for traveling away
from home, may be regarded as satisfying the substantiation
requirements of section 274(d). Sec. 1.274-5(j), Income Tax
Regs. Under this authority, the Commissioner issued Rev. Proc.
2001-47, 2001-2 C.B. 332 (applicable to petitioner’s travel
January through September 2002); Rev. Proc. 2002-63, 2002-2 C.B.
691 (applicable to petitioner’s travel October 2002 through
October 2003); Rev. Proc. 2003-80, 2003-2 C.B. 1037 (applicable
to petitioner’s travel November 2003 through September 2004); and
Rev. Proc. 2004-60, 2004-2 C.B. 682 (applicable to petitioner’s
travel October through December 2004) (collectively, the
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Last modified: March 27, 2008