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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 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.”
Respondent concedes that petitioners are entitled to a
miscellaneous itemized incidental expenses deduction for 2002
equal to the per diem rate then applicable for each day
petitioner was traveling away from home for business. Respondent
performed those calculations according to methods established by
relevant revenue procedures.
Petitioners may, as respondent has conceded, deduct the
incidental portion of the M&IE per diem rate for days that
petitioner worked away from home for which they have
substantiated the time, place, and business purpose of
petitioner’s travel. Johnson v. Commissioner, supra at 225; see
also Westling v. Commissioner, T.C. Memo. 2000-289. In
accordance with the applicable revenue procedures, respondent
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Last modified: March 27, 2008