UAL Corp. v. Comm'r
United States Tax Court
U, an international airline, paid its pilots and flight attendants (collectively, employees) per diem allowances. U paid the allowances to all employees; i.e., those who departed from and returned to their home bases on the same day and those who departed from and returned to their home bases on different days. U neither required nor received substantiation from the employees as to their uses of the allowances.
Read the full summary
U, an international airline, paid its pilots and flight attendants (collectively, employees) per diem allowances. U paid the allowances to all employees; i.e., those who departed from and returned to their home bases on the same day and those who departed from and returned to their home bases on different days. U neither required nor received substantiation from the employees as to their uses of the allowances. HELD: U may deduct the per diem allowances as personal service compensation under sec. 162(a)(1), I.R.C.
1ConcurrenceRuwe, J.
However, I believe it is appropriate to elaborate on why the per diem allowances for day trips and overnight trips are both deductible as compensation under section 162(a)(1).
United paid its employees per diem allowances at a rate of $1.50 per hour ($1.55 for pilots for certain portions of the years in issue) for the number of hours on duty or on flight assignment. United appears to have arrived at this number by estimating the expenses that would be incurred by an employee for one day, $36 ($37.20 for pilots for certain portions of the years in issue), and then dividing this number by 24…
2Cases cited20 opinions
- United States v. CorrellSupreme Court of the United States · 1967
- Commissioner v. KowalskiSupreme Court of the United States · 1977
- Paula Constr. Co. v. CommissionerUnited States Tax Court · 1972
- American Airlines, Inc. v. United StatesCourt of Appeals for the Federal Circuit · 2000
- Elliotts, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1983
15 more not listed; retrieve them via the Exa API.