9/3/2021
Notice 2021-52 provides the 2021-2022 special per diem rates for use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home, effective October 1, 2021, specifically:
(1) The special transportation industry meal and incidental expenses (M&IE) rates
(2) The rate for the incidental expenses only deduction
(3) The rates and list of high-cost localities for purposes of the high-low substantiation method
It modifies Notice 2020-71 to change the portion of the year Sedona, Arizona is a high-cost locality under section 5.
Rev. Proc. 2019-48 provides rules for using per diem rates to substantiate the amount of expenses for lodging, meals and incidental expenses for travel away from home rather than actual expenses: Taxpayers who use those per diem rates to substantiate the amount of travel expenses are able to use the federal per diem rates published annually by the General Services Administration. Rev. Proc. 2019-48 allows some taxpayers to use a special transportation industry rate, or to use rates under a high-low substantiation method for certain high-cost localities. The IRS announces these rates and the rate for the incidental expenses only deduction in an annual notice.
Use of a per diem substantiation method is not mandatory. Taxpayers can substantiate actual allowable expenses if they maintain adequate records or other evidence sufficient for proper substantiation.
IRB: 2021-38, 9/20/21