[Federal Register: July 1, 2003 (Volume 68, Number 126)]
[Rules and Regulations]
[Page 39011]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01jy03-4]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9064]
RIN 1545-BB20
Substantiation of Incidental Expenses
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final and temporary regulations.
-----------------------------------------------------------------------
SUMMARY: This document contains amendments to regulations relating to
the requirement under section 274 of the Internal Revenue Code to
substantiate business expenses for traveling while away from home. The
regulations affect taxpayers who deduct expenditures for incidental
expenses while traveling away from home. This document also contains
amendments to regulations under section 62 to conform cross-references.
DATES: Effective Date: These regulations are effective July 2, 2003.
Applicability Date: For dates of applicability, see Sec. 1.274-
5(m).
FOR FURTHER INFORMATION CONTACT: Sameera Hasan (202) 622-4930 (not a
toll free call).
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments to 26 CFR part 1. On November 12,
2002, the IRS and Treasury published in the Federal Register (67 FR
68512) a temporary regulation (TD 9020) relating to the substantiation
under section 274(d) of the Internal Revenue Code of incidental
expenses incurred while traveling away from home. On the same day the
IRS and Treasury published (67 FR 68539) a notice of proposed
rulemaking (REG-141832-02) cross-referencing the temporary regulations.
Written comments from two commentators were received. A commentator
initially requested a public hearing but subsequently withdrew the
request. No public hearing was held. The comments generally related to
implementation of these regulations in future guidance and will be
further considered in connection with that guidance. After
consideration of the comments, the proposed regulations are adopted by
this Treasury decision.
Special Analyses
It has been determined that this Treasury decision is not a
significant regulatory action as defined in Executive Order 12866.
Therefore, a regulatory assessment is not required. It is hereby
certified that these regulations will not have a significant economic
impact on a substantial number of small entities. This certification is
based upon the fact that these regulations do not require a collection
of information and do not impose any new or different requirements on
small entities. Therefore, a Regulatory Flexibility Analysis under the
Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required.
Pursuant to section 7805(f) of the Internal Revenue Code, the proposed
regulations preceding these regulations were submitted to the Chief
Counsel for Advocacy of the Small Business Administration for comment
on their impact.
Drafting Information
The principal author of these regulations is Sameera Hasan, Office
of Associate Chief Counsel (Income Tax & Accounting). However, other
personnel from the IRS and Treasury Department participated in the
development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Adoption of Amendments to the Regulations
0
Accordingly, 26 CFR part 1 is amended as follows:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
0
Par. 2. Section 1.62-2 is amended by removing the last three sentences
of paragraph (e)(2) and adding two sentences in their place to read as
follows:
Sec. 1.62-2 Reimbursements and other expense allowance arrangements.
* * * * *
(e) * * *
(2) * * * See Sec. 1.274-5(g) and (j), which grant the
Commissioner the authority to establish optional methods of
substantiating certain expenses. Substantiation of the amount of a
business expense in accordance with rules prescribed pursuant to the
authority granted by Sec. 1.274-5(g) or (j) will be treated as
substantiation of the amount of such expense for purposes of this
section.
* * * * *
0
Par. 3. Section 1.274-5 is amended by:
0
1. Revising paragraph (j)(3).
0
2. Adding a new sentence at the end of paragraph (m).
0
The revision and addition read as follows:
Sec. 1.274-5 Substantiation requirements.
* * * * *
(j) * * *
(3) Incidental expenses while traveling away from home. The
Commissioner may establish a method under which a taxpayer may use a
specified amount or amounts for incidental expenses paid or incurred
while traveling away from home in lieu of substantiating the actual
cost of incidental expenses. The taxpayer will not be relieved of the
requirement to substantiate the actual cost of other travel expenses as
well as the time, place, and business purpose of the travel.
* * * * *
(m) * * * However, paragraph (j)(3) of this section applies to
expenses paid or incurred after September 30, 2002.
* * * * *
0
Par. 4. Section 1.274-5T is amended by revising paragraph (j) to read
as follows:
Sec. 1.274-5T Substantiation requirements.
* * * * *
(j) [Reserved]. For further guidance, see Sec. 1.274-5(j).
Robert E. Wenzel,
Deputy Commissioner of Internal Revenue.
Approved: June 20, 2003.
Pamela F. Olson,
Assistant Secretary of the Treasury.
[FR Doc. 03-16599 Filed 6-30-03; 8:45 am]
BILLING CODE 4830-01-P