M&IE rates: "M" is for meals.

Author:Lynch, Michael
Position:Itemized deductions for meal and incidental expenses

* A taxpayer was captain of a vessel used to transport military vehicles and equipment worldwide. He maintained a principal residence in the state of Washington and was employed in Florida. His work required him to travel to many cities and be away from home continuously for long periods of time. His employer provided him with meals and lodging at no charge. However, he was responsible for his own incidental expenses, such as laundry, dry cleaning and local transportation. He kept no receipts to support these expenditures, but on his federal income tax return he took them as miscellaneous itemized deductions, using the per diem substantiation method and the meal and incidental expense (M&IE) rates of revenue procedure 96-28.

The IRS argued that M&IE rates cannot be used when only incidental (and not meal) expenses are incurred. The Tax Court rejected this argument and said the revenue procedure may apply to three distinct situations: when a traveling employee pays (1) only...

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