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the incidental portion of those rates. Id. at 210-211. The
taxpayer established that he had incurred incidental expenses
during his travel away from home and was allowed to use the
incidental portion of the M&IE rates to substantiate those
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
petitioner contends 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.” Petitioner is not entitled to deductions for meal
expenses he did not pay or incur. See Balla v. Commissioner,
T.C. Memo. 2008-18. He is, however, as respondent has conceded,
entitled to a miscellaneous itemized deduction for incidental
expenses as permitted in Johnson, and the applicable revenue
procedures for the years in issue, but only with respect to those
days when petitioner was working in international waters and for
which he must include income earned.
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Last modified: March 27, 2008