Per Diem for NON Transport Workers

[Bjorn]

I know this is basic. Could somebody give me the run down on when a taxpayer or employer can use per diem.

The debate is mainly around can you take a per diem if you get up at 4:00am to catch a 6:00am flight to Chicago and do your business there all day and then fly back to your home city on the last flight of the day arriving back at 11:00pm. One research service says you must be gone overnight unless you are subject to DOT rules. Another says if you are gone a really long time then you get the per diem

Does this fact pattern get a per diem?

I'm looking to maximize legal deductions for owners of an S-corp.
For Example:
They do meetings in the owners home and I suggested the Corp rent the home less than 14 days per year using reasonable rates comparable to hotel meetings rooms to get a deduction at the corp level but not have any income at the 1040 level.

They have lots of VERY long days but not too many over nights. Maybe I could get them some perdiems to deduct at the corp level and not have to pay income tax on it at the 1040 level.

Mahalo.
Bjorn

[Burke]

Discussion of the meal allowance rules indicates it is only available when "your employer (1) provides you with lodging; (2) reimburses you for actual cost of lodging; (3) pays the motel, hotel, etc directly for your lodging; (4) does not have a reasonable belief that you had lodging expenses (such as when you stay with friends or relatives..)" A Sub S corp can have an accountable plan for its owners/employees where they can submit receipts for reimbursement. If there is overnight lodging involved, partial per diem can be calculated for day of departure and day of return. Why would meetings be held in owner's home? No other office?

[TAXBILLY]

I know this is basic. Could somebody give me the run down on when a taxpayer or employer can use per diem.

The debate is mainly around can you take a per diem if you get up at 4:00am to catch a 6:00am flight to Chicago and do your business there all day and then fly back to your home city on the last flight of the day arriving back at 11:00pm. One research service says you must be gone overnight unless you are subject to DOT rules. Another says if you are gone a really long time then you get the per diem

Does this fact pattern get a per diem?

I'm looking to maximize legal deductions for owners of an S-corp.
For Example:
They do meetings in the owners home and I suggested the Corp rent the home less than 14 days per year using reasonable rates comparable to hotel meetings rooms to get a deduction at the corp level but not have any income at the 1040 level.

They have lots of VERY long days but not too many over nights. Maybe I could get them some perdiems to deduct at the corp level and not have to pay income tax on it at the 1040 level.

Mahalo.
Bjorn

Start you research here:

http://www.irs.gov/newsroom/article/0,,id=164208,00.html

taxbilly

[solomon]

See Rev. Proc. 2009-59

[Nashville]

HillBilly

taxbilly

HillBilly, I can't believe you are from Merritt Island. Urbane, Educated, Polished. And probably involved with NASA, and during Canaveral launch parties maybe letting your hair down a little except most of them are too early in the morning for any serious cavorting.

You missed the golden opportunity to join some few of us from places like Chittlin' Branch, AL, Gopher Gulch, MS, Whiskey Grove, SC, or Poverty Mtn, KY. If we can borrow your rusty truck and deer mount we'll show you what the ethereal lifestyle is all about!

Been readin' your posts -- Good tax stuff. Welcome to the board!

[Burke]

See Rev. Proc. 2009-59

Did you mean 2009? Never mind, I found it. It's 2008-59. See Section 3. (2) Locality of travel . The term “locality of travel” means the locality where an employee traveling away from home in connection with the performance of services as an employee of the employer stops for sleep or rest.

[solomon]

Did you mean 2009? Never mind, I found it. It's 2008-59. See Section 3. (2) Locality of travel . The term “locality of travel” means the locality where an employee traveling away from home in connection with the performance of services as an employee of the employer stops for sleep or rest.

Sorry - I did mean 2008.

[Bjorn]

Do you get the per diem

Thank you all for the great feedback. Does anybody think the person can claim receive a per diem from the company on those REALLY long days, but without a hotel?
He wants a corp deduction for the per diem AND not to pick it up as income on those really long days.
Mahalo

[Bees Knees]

TTB page 8-10 says:

If a taxpayer temporarily travels away from his or her tax home
on business, the cost of the travel is deductible. A taxpayer travels
away from his or her tax home if business requires the taxpayer
to be away substantially longer than an ordinary day’s work, and
the taxpayer needs to sleep or rest to meet the demands of the
work while away from home. This requirement is not satisfied by
merely napping in the car. However, a taxpayer does not have to
be away from home for a whole day or from dusk to dawn as long
as relief from duty is long enough to get necessary sleep or rest.

Checking the link to Pub 463, it appears that the rest or sleep requirement has to be satisfied in order to make a long day a travel day. That could be why transportation workers qualify because they are mandated to sleep after so many hours of driving.

However, I would argue that a normal person could never be expected to not stay over night on a 4:00AM to 11:00PM work day, and the only reason these people choose to fly home is because they drink gallons of coffee, are high strung, and will all die of a heart attack before age 50.

My vote is to treat it as a travel expense.