Rev. Rul. 77-410

This Revenue Ruling modifies Rev. Rul. 74-433, 1974-2 C.B. 92, with respect to the mileage allowance for transportation paid by employers to employees.

The first sentence of the sixth paragraph of Rev. Rul. 74-433 is amended to read as follows:

In any case where a fixed mileage allowance not exceeding 17 cents per 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 subdivision (iii)(a) thereof) of section 1.274-5 of the regulations, then such an allowance shall be deemed as satisfying, with respect to such travel amounts, the substantiation requirements of section 1.274-5(c) and the adequate accounting requirements of section 1.274-5(e).

The first sentence of the ninth paragraph of Rev. Rul. 74-433 is amended to read as follows:

If a subsistence reimbursement arrangement or a per diem allowance in lieu of subsistence exceeds the greater of $44 per day or the maximum per diem rate authorized to be paid by the Federal Government in the locality in which the travel is performed, or if a mileage allowance exceeds 17 cents per mile, the presence of unusual circumstances which account for the variation may, nevertheless, constitute grounds for considering the arrangement or allowance as equivalent to substantiation and an adequate accounting to an employer of amount of travel expense for purposes of sections 1.162-17 and 1.274-5 of the regulations.

The amended paragraphs of Rev. Rul. 74-433 apply for taxable years beginning after December 31, 1976.

Rev. Rul. 74-433 is modified.

¹ Also released as News Release IR-1893, dated October 7, 1977.