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For more extended trips, the employer has a choice: reimbursing the costs of lodging, car rentals, meals and incidental expenses directly, or using the IRS per-diem rate for that destination. Revenue procedure 96-64 says 40% of a per diem paid for lodging, meals and incidental expenses is treated as having been paid for food and beverages when the amount is less than the federal rate. 94-77, 96-28 and 96-64) treats the per-diem allowances as being paid only for meals and incidental expenses (M&IE). |
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