n-00-48.pdf

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# Part III - Administrative, Procedural, and Miscellaneous

Optional Per Diem Rates for Employees, Self-employed Individuals,
and Other Taxpayers Used in Computing Deductible Costs

Notice 2000-48

## PURPOSE

This notice informs taxpayers that the U.S. General Services
Administration will change the per diem rates for travel by
federal employees as of October 1, 2000. These rates ("GSA
rates") are incorporated by reference in Rev. Proc. 2000-9, 2000-
2 I. R.B. 280, which allows their use in substantiating the amount
of certain travel expenses, and are set forth in full in
Publication 1542. However, as provided below, taxpayers may
either use the new GSA rates or choose to continue to treat the
current GSA rates as the federal per diem rates for travel
expenses paid or incurred through the end of calendar year 2000.

Also, comments are requested concerning application of the
October 1 annual GSA rate changes in future years.

### GSA PER DIEM RATES

Rev. Proc. 2000-9 generally provides that, for travel within
the continental United States ("CONUS"), the federal meal and
incidental expense ("M&IE") rates and the federal per diem rates

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published by GSA may be used to substantiate certain travel
expenses. GSA has recently announced its intention to update
these rates annually effective October 1, rather than January 1,
to match the federal government's fiscal year. The GSA rates
will be available on the GSA website at
www. policyworks.gov/perdiem. Accordingly, for purposes of Rev.
Proc. 2000-9, the updated GSA rates will apply as of October 1,
2000, to determine the amount of the CONUS travel expenses paid
or incurred on or after that date, unless a taxpayer uses the
transition rule described below. Consequently, the April 2000
revision of Pub. 1542, Per Diem Rates (For Travel Within the
Continental United States), which reprints the GSA rates made
effective January 1, 2000, will not be effective for travel on or
after October 1, 2000, unless the election described below is in
effect.

### TRANSITION RULE

To ease the transition to the GSA rates that will be updated
as described above, the Internal Revenue Service will allow
taxpayers, in applying Rev. Proc. 2000-9, to use the GSA rates in
effect for the first 9 months of 2000 ("current rates") for
expenses of CONUS travel while away from home that are paid or
incurred before January 1, 2001, in lieu of the updated GSA
rates. A taxpayer must consistently use either the current GSA
rates or the updated GSA rates for the period of October 1, 2000,

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through December 31, 2000. During this period, a taxpayer may
not use the current GSA rates for some travel and the updated GSA
rates for other travel.

SPECIAL RATES PROVIDED IN REV. PROC. 2000-9

Rev. Proc. 2000-9 provides two optional methods that may be
used in lieu of the use of the GSA rates to substantiate the
amount of certain travel expenses. Section 5 provides a
simplified High-Low Substantiation Method for employers to
substantiate the amount of employees' lodging, meal, and
incidental expenses, and section 4.04 provides special M&IE rates
for the transportation industry as an alternative to the M&IE
rates published by GSA. Rev. Proc. 2000-9 provides that the use
of these optional substantiation methods must be consistent
throughout the 2000 calendar year. When the rates for these
optional methods ("special rates") are updated in the next per
diem revenue procedure (expected to be published in September
2000), the Service will permit taxpayers using the optional
methods for travel in calendar year 2000 to use either the
updated special rates, or the current special rates, for the last
3 months of the 2000 calendar year. However, such taxpayers may
not use the GSA rates instead of the special rates for that
period.

REQUEST FOR COMMENTS

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The Treasury Department and the Service invite comments on
this notice and on future per diem revenue procedures. In
particular, comments are requested on whether, in future years,
the High-Low Substantiation Method and the special transportation
industry rates should be updated to match the October 1 effective
date of the GSA rates or should continue to apply on a calendar-
year basis. Also, comments are requested on whether, in future
years, the revenue procedure should continue to make the
substantiation rules effective as the rates are announced by GSA
or should maintain consistent rates on a calendar-year basis by
disregarding GSA's annual update (for employers other than
federal employers) until the beginning of the next calendar year.
Written comments should be submitted by October 27, 2000. An
original and eight copies of written comments should be sent to:
Internal Revenue Service

Attn:
CC: MSP: R (Notice 2000-48)
Room 5228 (IT&A:Br2)

P.O. Box 7604
Ben Franklin Station
Washington, DC 20044.

or hand delivered between the hours of 8 a.m. and 5 p.m. to:

Courier s Desk

Internal Revenue Service

Attn:

CC: MSP : R (Notice 2000-48)

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Room 5228 (IT&A:Br2)
1111 Constitution Avenue, NW
Washington, D.C.

Alternatively, comments may be submitted electronically at the
following address :

Joel . S. Rutstein@m1 . irscounsel . treas . gov.

# DRAFTING INFORMATION

The principal author of this notice is Edwin B. Cleverdon of
the Office of Associate Chief Counsel (Income Tax and
Accounting) . For further information regarding this notice
contact Mr. Cleverdon at (202) 622-4920 (not a toll-free call) .