Rev. Rul. 87-93

Rev. Rul. 87-93

This revenue ruling modifies Rev. Rul. 80-62, 1980-1 C.B. 63, as modified by Rev. Rul. 80-203, 1980-2 C.B. 101, Rev. Rul. 84-51, 984-1 C.B. 90, and Rev. Rul. 85-155, 1985-2 C.B. 89, with respect to the mileage allowance for transportation paid by employers to employees.

The sixth paragraph of Rev. Rul. 80-62, which was modified by Rev. Rul. 80-203, Rev. Rul. 84-51, and Rev. Rul. 85-155, is further modified as follows:

If a fixed mileage allowance not exceeding 22.5 cents a mile is used by an employer in payment of an employee's ordinary and necessary expenses of transportation while traveling away from home, and the elements of time, place, and business purpose of the travel are substantiated in accordance with paragraphs (b)(2) and (c) (other than subparagraph (2)(iii)(a) thereof) of section 1.274-5 of the Income Tax Regulations, such an allowance will be deemed as satisfying, with respect to such travel amounts, the substantiation requirements of section 1.274-5(c) of the regulations and the adequate accounting requirements of section 1.274-5(e). Also, if an employer grants an allowance not exceeding 22.5 cents a mile to an employee for ordinary and necessary transportation expenses not involving travel away from home, such an arrangement will be considered to be an accounting to the employer within the meaning of section 1.162-17(b). However, an employer may grant an additional allowance for the parking fees and tolls attributable to the traveling and transportation expenses as separate items.

This modification is effective with respect to expenses paid or incurred after December 31, 1986.

EFFECT ON OTHER REVENUE RULINGS

Rev. Rul. 80-62, as modified by Rev. Rul. 80-203, Rev. Rul. 84- 51, and Rev. Rul. 85-155, is further modified.