By Dan M. Smolnik, The Tax Advisor
The business meal tax deduction has been debated for decades, the subject of presidential ire and of incremental diminution. In just the past few years, uncertainty has reigned regarding the availability and requirements for the business meal deduction because of its abrupt separation from its historic tax deduction counterpart — the business entertainment expense deduction. However, with the adoption of final regulations in 2020, the IRS has provided guidance on deducting the costs of business meals separately from entertainment. Since then, the deduction has even been temporarily restored to its former magnitude, allowing the full cost of such meals to be deducted under certain circumstances.
This article examines the history of the deduction and considers the 2020 final regulations and their implied separate treatment of business meals consumed while traveling away from the taxpayer's home. Also, with the rapidly rising return of the dine-in restaurant meal as pandemic restrictions in many areas across the United States ease,1 this article provides a framework by which taxpayers may effectively document and substantiate their claims to the business meal deduction.