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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), and Rev. Proc. 2002-63, 2002-2
C.B. 691 (applicable to petitioner’s travel October through
December 2002) (collectively, the 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, provides
the following introduction:
SECTION 1. PURPOSE
This revenue procedure updates Rev. Proc. 2001-47,
2001-2 C.B. 332, 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
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Last modified: March 27, 2008