Per Diem for Self Employed vs Employee

[tonia2021]

Another question regarding per diem.

Do you treat a self employed truck driver differently than an employee that drives a truck with regards to per diem rates. Does the employee still get the same per day amount? I got a new client who was audited on their tax return and the IRS disallowed the per diem amount that was taken and deducted on Schedule A.

Thanks for the response.

[thomtax]

I got a new client who was audited on their tax return and the IRS disallowed the per diem amount that was taken and deducted on Schedule A.

Thanks for the response.

Questions
1 - What reason was given for disallowing deduction? Was it because he could not (or did not) substantiate nights on the road or something else? This answer could give you a clue as to what you are looking for.
2 - Did he actually take it on schedule A or was it on Form 2106 that carried to Schedule A?

LT

[newbie]

Bump to top - I am curious too, why the disallowance?

[S T]

Per Diem

Maybe as a Sched A deduct, the t/p did not have his logs. The truck driver logs would have provided the days out for per diem.

Sandy

[thomtax]

tonia - Did you ever find out why they disallowed the per diem? I do several truck drivers and am wondering if this is something for me to check into.

[Matt Sova]

High/Low

Perhaps they used the High/Low method which is only used by employers to pay their employees an allowance for travel (hotels, meals & incidentals).

The High/Low method cannot be used by employees or self employed individuals as a standard deduction for meals. TTB Top of 2nd column on page 8-5.

Also, per diem rates are only allowed for meals on self employed and 2106. Actual expenses must be used for lodging.

[hyacinth]

might depend on the trucking company

Some major trucking companies are already giving the truck drivers the equivalent of per diem as tax free income. Seems many of the truck drivers don't know the tax significance of that. Nor do they know what to tell the preparer.

[thomtax]

Bringing this back to top because I would really like to know about why the disallowance.

LT

[tonia2021]

I will check with the taxpayer to see if I can get the IRS paperwork from the audit. All I know is that he "fired" the old accountant because he took this deduction and then when audited he owed the money back.

[thomtax]

Thanks, tonia. I do several truckers and am wondering if this is something that I need to be concerned about.

[Jesse]

Thanks, tonia. I do several truckers and am wondering if this is something that I need to be concerned about.

Are your truckers good about counting partial days? Also, do you worry about dissallowance of expenses as they really don't have a tax home?

I have just a couple and worry more w/ the circular 230 issues.

[S T]

Logs

At least in Calif, the truckers that I have had experience with have to keep a log that is turned in on a regular basis. So it should be easy for the client to provide you with the partial and full days.

You can let your clients know as well, if they have a computer, that there are several sites on the internet. Just google trucker logs. A few of them look to be free!

Sandy

[tonia2021]

I finally got to look at the tax return that had the disallowed expenses on it. It looks like the old tax prepared took the per diem amoun for meals, but also took a per diem for lodging. After the IRS agent disallowed the per diem amount that was taken, the taxpayer then wasn't able to itemize. This taxpayer was an employee and the agent was correct to disallow the amount taken for lodging.

Thanks for all of the earlier responses.