Edward D. Clark - Page 12




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          applicable revenue procedures).  Under the applicable revenue               
          procedures, taxpayers may elect to use, in lieu of substantiating           
          actual expenses, certain authorized methods for deemed                      
          substantiation of employee lodging, meal, and incidental expenses           
          incurred while traveling away from home.  Rev. Proc. 2002-63,               
          sec. 1, 2002-2 C.B. at 691; Rev. Proc. 2003-80, sec. 1, 2003-2              
          C.B. at 1037; and Rev. Proc. 2004-60, sec. 1, 2004-2 C.B. at 682,           
          each provide the following introduction:                                    
               SECTION 1.  PURPOSE                                                    
                    This revenue procedure updates * * * [the previous                
               revenue procedure relating to per diem allowances] by                  
               providing rules under which the amount of ordinary and                 
               necessary business expenses of an employee for lodging,                
               meal, and incidental expenses or for meal and                          
               incidental expenses incurred while traveling away from                 
               home will be deemed substantiated under section 1.274-5                
               of the Income Tax Regulations when a payor (the                        
               employer, its agent, or a third party) provides a per                  
               diem allowance under a reimbursement or other expense                  
               allowance arrangement to pay for the expenses.  In                     
               addition, this revenue procedure provides an optional                  
               method for employees and self-employed individuals who                 
               pay or incur meal costs to use in computing the                        
               deductible costs of business meal and incidental                       
               expenses paid or incurred while traveling away from                    
               home.  This revenue procedure also provides an optional                
               method for use in computing the deductible costs of                    
               incidental expenses paid or incurred while traveling                   
               away from home by employees and self-employed                          
               individuals who do not pay or incur meal costs and who                 
               are not reimbursed for the incidental expenses.  Use of                
               a method described in this revenue procedure is not                    
               mandatory, and a taxpayer may use actual allowable                     
               expenses if the taxpayer maintains adequate records or                 
               other sufficient evidence for proper substantiation.                   
               * * *                                                                  









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