Evening star., 1963-01-03

| fNAaRS oNSCAAANo 90 40 AAC"
lquired of individual taxpayers.
If this is done, the company
will have on file all the records
1t needs when and If the IRIS
demands proof that the en-
Iployes spent as much as the
company claimed for tax deduc-
tions.
However, If a traveller is re-
imbursed by his employer, and
If he spends not more than SIS
a day for meals, lodging and
travel incidentals, the Govern
ment will accept his employers
word that the expenses are rea-
sonable and need not be sub
Stantiated, either by the COM
pany or the employe.
Companies which follow the
fairly common practice of CIV
ling employees a flat per diem
allowance for travel of $25 or
less need not keep substanti-
ating records. The $25 limit
does not include entertain
Iment. or plane or rail fares.
Similarly, a mileage allow
ance for transportation can be
used without substantiation If
1t does not exceed is cents a
mile.
One major corporation has
protested that it will have to
rent warehouses to store all ex-
pense accounts. receipts, and
vouchers. These substantiating
papers must oe kept for a least
three years, but IRIS expects to
shorten this.
The new regulations stem
from the tax law passed by
Congress last October. 1t says
that deductions henceforth
shall be based on precise records
rather than reasonable esti-
Imates" as in the past.
Under reasonable ,esti-
mates" some taxpayers have
estimated their expenditures,
given them a blanket label like
"sales promotion" and claimed
their deductions. If challenged,
they needed only to make a
reasonable showing that the
outlays were ordinary and
necessary" in the pursuit of
business.
The day-to-day record of
business travel which the new
regulations require must be
completed within a couple of
days after the expenditure is
made and must include the fol-
lowing information:
l. Amount. Each outlay must
be noted separately, although
breakfast, lunch and dinner
may be shown for each day
as a single item, meals" Small
and incidental items also may
be grouped under such head
ings as taxi fares. tips, or
gas and oil.
2. Time. The record must
show the dates Of departure
and return, and the number OF
days spent away from home
on business.
3. Place the city of des-
: tination or area OF travel.
4. Business purpose. The
business reason for the travel
must be stated.
Bans Vacation Tie-In
No longer will 1t be possible
; for a traveller 10 deduct the
full transportation costs to,and
from Miami, for instance. II he
. attends a convention for a
week and then stays on for
two weeks Of vacation.
He must pro-rate the trans
portation expense II he devotes
. as much as rs per cent Of the
"trip to personal matters, II the
whole trip lasts longer than a
week.
In another regulation still
TO come, IRIS will specify its
rules for implementing one
other important decree OF
Congress. The law forbids de-
deductions for lavish or ex.
travagant" outlays during busi-
ness travel.
The mysterious border be-
tween what is extravagant and
what isn't will have TO be de-
fined.
The Qualification. due next
month, probably will make II
hard for an executive TO justify
"a business meeting" on a yacht
cruising the Bahamas. or foi
a salesman 10 make his sales
pitch In an expensive night
spot.
Tomorrow: Some standards
Of living may change.