Washington, D.C. (May 6, 2004) -- A new revenue procedure allows the use of statistical sampling in determining deductible business meal and entertainment expenses.
While deductions for M&E expenses generally are limited to 50 percent of the expense, the 50 percent disallowance does not apply to certain M&E expenses. This revenue procedure provides a statistical sampling methodology for use in establishing the amount of substantiated M&E expenses that are excepted from the 50 percent disallowance. The proper use of statistical sampling will relieve taxpayers, especially those with large M&E accounts, of the burden of scrutinizing each item relating to an M&E amount.
“Today’s announcement reflects our goal to impose the least amount of burden necessary for taxpayers to meet their tax responsibilities,” said Internal Revenue Service Commissioner Mark W. Everson. “We’re pleased to take this step and any others that will help reduce burden.”
"Use of statistical sampling in this context significantly reduces taxpayer burden," said acting assistant secretary for tax policy Gregory F. Jenner. "Providing guidance on how to use statistical sampling provides certainty and will reduce future controversy."
Rev. Proc 2004-29, available online at
-- WebCPA staff
