2019 Automobile Mileage Rates Announced by IRS

The IRS has released the 2019 automobile mileage numbers in Notice 2019-02.

The standard rate for transportation or travel expense is 58 cents per mile for business use in 2019.  The standard rate for 14 cents per mile for use of an automobile for providing gratuitous services to a charitable organization and 20 cents per mile for medical expenses.  The 20 cent rate would also apply to moving expenses under §217, though for most taxpayers such a deduction is not available for 2019.

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IRS Publishes Revised Special Per Diem Rates for Period from October 1, 2018 to September 30, 2019

The IRS in Notice 2018-77 provided updated special per diem effective for the period from October 1, 2018 to September 30, 2019.  These special rates include the rate for the special transportation industry meals and incidental expenses (M&IE) rate, the rate for the incidentals-only deduction and the rates and list of high-cost localities for purposes of the high-low substantiation method.

The special transportation industry rates for 2018-2019 are $66 for any locality of travel in the continental United States and $71 for any locality of travel outside the continental United States.  These rates are the same as applied in the prior year.  The general rules for qualifying to use these rates and how to use them are found in Section 4.04 of Revenue Procedure 2011-47.

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Full Deduction Allowed to Hockey Team for Meals Provided to Players at Away Games

The Tax Court refused to go along with the IRS’s view of strictly interpreting the provisions under IRC §274(n)(2)(B), allowing a full deduction for meals provided by the Boston Bruins NHL hockey team to players and employees traveling with the team at away games in the case of Jacobs v. Commissioner, 148 TC No. 24.

In order to get a 100% deduction for meals provided to employees, rather than only 50%, IRC §274(n)(2)(B) provides a full deduction is allowed “in the case of an expense for food or beverages, such expense is excludable from the gross income of the recipient under section 132 by reason of subsection (e) thereof (relating to de minimis fringes)…”

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IRS Publishes Revised Special Per Diem Rates for Period from October 1, 2016 to September 30, 2017

The IRS in Notice 2016-58 provided updated special per diem effective for the period from October 1, 2016 to September 30, 2017.  These special rates include the rate for the special transportation industry meals and incidental expenses (M&IE) rate, the rate for the incidentals-only deduction and the rates and list of high-cost localities for purposes of the high-low substantiation method.

The special transportation industry rates for 2016-2017 are $63 for any locality of travel in the continental United States and $68 for any locality of travel outside the continental United States.  The general rules for qualifying to use these rates and how to use them are found in Section 4.04 of Revenue Procedure 2011-47.

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IRS Publishes Revised Special Per Diem Rates for Period from October 1, 2015 to September 30, 2016

The IRS in Notice 2015-63 provided updated special per diem effective for the period from October 1, 2015 to September 30, 2016.  These special rates include the rate for the special transportation industry meals and incidental expenses (M&IE) rate, the rate for the incidentals-only deduction and the rates and list of high-cost localities for purposes of the high-low substantiation method.

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Attorney's Expenses Related to Aircraft Primarily Found to Be Personal in Nature, Most Deductions Disallowed

IRC §274(d) provides additional documentation requirements for a taxpayer to obtain a deduction for certain items, including travel related to listed property—which, in the case at hand, was an airplane.  The decision in the case of Peterson v. Commissioner, TC Memo 2015-1 deals with the fact that it’s not enough to have records—those records also have to support the deduction in question.

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Entertainment Items Offered to Purchasers of Advertising Treated as Reductions of Purchase Price and Not Subject to §274 Limitations

If a taxpayer purchases travel and entertainment items to give to customers who purchase specified amounts of advertising from the taxpayer, does the taxpayer treat that as a cost of sale or some other expense?  And, regardless, does the taxpayer have to take into account the disallowance provisions of §274, such as the 50% disallowance of business entertainment? 

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