United Air Lines, Inc. v. United States

OPINION

MILLER, Judge.

This case is before the court after trial.1 The Internal Revenue Code subjects wages received by an employee from an employer to withholding for federal income taxes and Social Security. To be decided is whether and to what extent per diems adjusted for on-duty hours and paid to reimburse travel expenses are considered “wages” exempt from tax liability under the “travel expense” exemption.2 This legal question hinges on factual determinations as to whether the employer had an objectively reasonable belief that 1) the per diems were equal to or less than the actual travel…