26 U.S.C. § 274
No deduction otherwise allowable under this chapter shall be allowed for any item-
With respect to an activity which is of a type generally considered to constitute entertainment, amusement, or recreation, or
With respect to a facility used in connection with an activity referred to in subparagraph (A).
For purposes of applying paragraph (1)-
Notwithstanding the preceding provisions of this subsection, no deduction shall be allowed under this chapter for amounts paid or incurred for membership in any club organized for business, pleasure, recreation, or other social purpose.
No deduction shall be allowed under this chapter for the expense of any qualified transportation fringe (as defined in section 132(f)) provided to an employee of the taxpayer.
No deduction shall be allowed under section 162 or section 212 for any expense for gifts made directly or indirectly to any individual to the extent that such expense, when added to prior expenses of the taxpayer for gifts made to such individual during the same taxable year, exceeds $25. For purposes of this section, the term "gift" means any item excludable from gross income of the recipient under section 102 which is not excludable from his gross income under any other provision of this chapter, but such term does not include-
In the case of any individual who travels outside the United States away from home in pursuit of a trade or business or in pursuit of an activity described in section 212, no deduction shall be allowed under section 162 or section 212 for that portion of the expenses of such travel otherwise allowable under such section which, under regulations prescribed by the Secretary, is not allocable to such trade or business or to such activity.
Paragraph (1) shall not apply to the expenses of any travel outside the United States away from home if-
For purposes of this subsection, travel outside the United States does not include any travel from one point in the United States to another point in the United States.
No deduction or credit shall be allowed-
unless the taxpayer substantiates by adequate records or by sufficient evidence corroborating the taxpayer's own statement (A) the amount of such expense or other item, (B) the time and place of the travel or the date and description of the gift, (C) the business purpose of the expense or other item, and (D) the business relationship to the taxpayer of the person receiving the benefit. The Secretary may by regulations provide that some or all of the requirements of the preceding sentence shall not apply in the case of an expense which does not exceed an amount prescribed pursuant to such regulations. This subsection shall not apply to any qualified nonpersonal use vehicle (as defined in subsection (i)).
Subsection (a) shall not apply to-
Expenses for food and beverages (and facilities used in connection therewith) furnished on the business premises of the taxpayer primarily for his employees.
Except as provided in subparagraph (B), expenses for goods, services, and facilities, to the extent that the expenses are treated by the taxpayer, with respect to the recipient of the entertainment, amusement, or recreation, as compensation to an employee on the taxpayer's return of tax under this chapter and as wages to such employee for purposes of chapter 24 (relating to withholding of income tax at source on wages).
In the case of a recipient who is a specified individual, subparagraph (A) and paragraph (9) shall each be applied by substituting "to the extent that the expenses do not exceed the amount of the expenses which" for "to the extent that the expenses".
For purposes of clause (i), the term "specified individual" means any individual who-
For purposes of this clause, a person is a related party with respect to another person if such person bears a relationship to such other person described in section 267(b) or 707(b).
Expenses paid or incurred by the taxpayer, in connection with the performance by him of services for another person (whether or not such other person is his employer), under a reimbursement or other expense allowance arrangement with such other person, but this paragraph shall apply-
Expenses for recreational, social, or similar activities (including facilities therefor) primarily for the benefit of employees (other than employees who are highly compensated employees (within the meaning of section 414(q))). For purposes of this paragraph, an individual owning less than a 10-percent interest in the taxpayer's trade or business shall not be considered a shareholder or other owner, and for such purposes an individual shall be treated as owning any interest owned by a member of his family (within the meaning of section 267(c)(4)). This paragraph shall not apply for purposes of subsection (a)(3).
Expenses incurred by a taxpayer which are directly related to business meetings of his employees, stockholders, agents, or directors.
Expenses directly related and necessary to attendance at a business meeting or convention of any organization described in section 501(c)(6) (relating to business leagues, chambers of commerce, real estate boards, and boards of trade) and exempt from taxation under section 501(a).
Expenses for goods, services, and facilities made available by the taxpayer to the general public.
Expenses for goods or services (including the use of facilities) which are sold by the taxpayer in a bona fide transaction for an adequate and full consideration in money or money's worth.
Expenses paid or incurred by the taxpayer for goods, services, and facilities to the extent that the expenses are includible in the gross income of a recipient of the entertainment, amusement, or recreation who is not an employee of the taxpayer as compensation for services rendered or as a prize or award under section 74. The preceding sentence shall not apply to any amount paid or incurred by the taxpayer if such amount is required to be included (or would be so required except that the amount is less than $600) in any information return filed by such taxpayer under part III of subchapter A of chapter 61 and is not so included.
For purposes of this subsection, any item referred to in subsection (a) shall be treated as an expense.
This section shall not apply to any deduction allowable to the taxpayer without regard to its connection with his trade or business (or with his income-producing activity). In the case of a taxpayer which is not an individual, the preceding sentence shall be applied as if it were an individual.
For purposes of this chapter, if deductions are disallowed under subsection (a) with respect to any portion of a facility, such portion shall be treated as an asset which is used for personal, living, and family purposes (and not as an asset used in the trade or business).
In the case of any individual who attends a convention, seminar, or similar meeting which is held outside the North American area, no deduction shall be allowed under section 162 for expenses allocable to such meeting unless the taxpayer establishes that the meeting is directly related to the active conduct of his trade or business and that, after taking into account in the manner provided by regulations prescribed by the Secretary-
it is as reasonable for the meeting to be held outside the North American area as within the North American area.
In the case of any individual who attends a convention, seminar, or other meeting which is held on any cruise ship, no deduction shall be allowed under section 162 for expenses allocable to such meeting, unless the taxpayer meets the requirements of paragraph (5) and establishes that the meeting is directly related to the active conduct of his trade or business and that-
With respect to cruises beginning in any calendar year, not more than $2,000 of the expenses attributable to an individual attending one or more meetings may be taken into account under section 162 by reason of the preceding sentence.
For purposes of this subsection-
The term "North American area" means the United States, its possessions, and the Trust Territory of the Pacific Islands, and Canada and Mexico.
The term "cruise ship" means any vessel sailing within or without the territorial waters of the United States.
No deduction shall be allowed under section 162 for expenses allocable to attendance at a convention, seminar, or similar meeting on any cruise ship unless the taxpayer claiming the deduction attaches to the return of tax on which the deduction is claimed-
For purposes of this subsection, the term "North American area" includes, with respect to any convention, seminar, or similar meeting, any beneficiary country if (as of the time such meeting begins)-
For purposes of this paragraph, the term "beneficiary country" has the meaning given to such term by section 212(a)(1)(A) of the Caribbean Basin Economic Recovery Act; except that such term shall include Bermuda.
The Secretary is authorized to negotiate and conclude an agreement for the exchange of information with any beneficiary country. Except as provided in clause (ii), an exchange of information agreement shall provide for the exchange of such information (not limited to information concerning nationals or residents of the United States or the beneficiary country) as may be necessary or appropriate to carry out and enforce the tax laws of the United States and the beneficiary country (whether criminal or civil proceedings), including information which may otherwise be subject to nondisclosure provisions of the local law of the beneficiary country such as provisions respecting bank secrecy and bearer shares. The exchange of information agreement shall be terminable by either country on reasonable notice and shall provide that information received by either country will be disclosed only to persons or authorities (including courts and administrative bodies) involved in the administration or oversight of, or in the determination of appeals in respect of, taxes of the United States or the beneficiary country and will be used by such persons or authorities only for such purposes.
An exchange of information agreement need not provide for the exchange of qualified confidential information which is sought only for civil tax purposes if-
For purposes of this subparagraph, the term "qualified confidential information" means information which is subject to the nondisclosure provisions of any local law of the beneficiary country regarding bank secrecy or ownership of bearer shares.
For purposes of this subparagraph, the determination of whether information is sought only for civil tax purposes shall be made by the requesting party.
Any exchange of information agreement negotiated under subparagraph (C) shall be treated as an income tax convention for purposes of section 6103(k)(4). The Secretary may exercise his authority under subchapter A of chapter 78 to carry out any obligation of the United States under an agreement referred to in subparagraph (C).
The following shall be published in the Federal Register-
No deduction shall be allowed under section 212 for expenses allocable to a convention, seminar, or similar meeting.
For purposes of subsection (d), the term "qualified nonpersonal use vehicle" means any vehicle which, by reason of its nature, is not likely to be used more than a de minimis amount for personal purposes.
No deduction shall be allowed under section 162 or section 212 for the cost of an employee achievement award except to the extent that such cost does not exceed the deduction limitations of paragraph (2).
The deduction for the cost of an employee achievement award made by an employer to an employee-
For purposes of this subsection-
The term "employee achievement award" means an item of tangible personal property which is-
For purposes of clause (i), the term "tangible personal property" shall not include-
The term "qualified plan award" means an employee achievement award awarded as part of an established written plan or program of the taxpayer which does not discriminate in favor of highly compensated employees (within the meaning of section 414(q)) as to eligibility or benefits.
An employee achievement award shall not be treated as a qualified plan award for any taxable year if the average cost of all employee achievement awards which are provided by the employer during the year, and which would be qualified plan awards but for this subparagraph, exceeds $400. For purposes of the preceding sentence, average cost shall be determined by including the entire cost of qualified plan awards, without taking into account employee achievement awards of nominal value.
For purposes of this subsection-
In the case of an employee achievement award made by a partnership, the deduction limitations contained in paragraph (2) shall apply to the partnership as well as to each member thereof.
An item shall not be treated as having been provided for length of service achievement if the item is received during the recipient's 1st 5 years of employment or if the recipient received a length of service achievement award (other than an award excludable under section 132(e)(1)) during that year or any of the prior 4 years.
An item provided by an employer to an employee shall not be treated as having been provided for safety achievement if-
No deduction shall be allowed under this chapter for the expense of any food or beverages unless-
Paragraph (1) shall not apply to-
No deduction shall be allowed under this chapter for any expense incurred for providing any transportation, or any payment or reimbursement, to an employee of the taxpayer in connection with travel between the employee's residence and place of employment, except as necessary for ensuring the safety of the employee.
In the case of any qualified bicycle commuting reimbursement (as described in section 132(f)(5)(F)), this subsection shall not apply for any amounts paid or incurred after December 31, 2017, and before January 1, 2026.
No deduction shall be allowed under this chapter for expenses incurred for transportation by water to the extent such expenses exceed twice the aggregate per diem amounts for days of such transportation. For purposes of the preceding sentence, the term "per diem amounts" means the highest amount generally allowable with respect to a day to employees of the executive branch of the Federal Government for per diem while away from home but serving in the United States.
Subparagraph (A) shall not apply to-
No deduction shall be allowed under this chapter for expenses for travel as a form of education.
No deduction shall be allowed under this chapter (other than section 217) for travel expenses paid or incurred with respect to a spouse, dependent, or other individual accompanying the taxpayer (or an officer or employee of the taxpayer) on business travel, unless-
The amount allowable as a deduction under this chapter for any expense for food or beverages shall not exceed 50 percent of the amount of such expense which would (but for this paragraph) be allowable as a deduction under this chapter.
Paragraph (1) shall not apply to any expense if-
Clauses (i) and (ii) of subparagraph (C) shall not apply to vessels primarily engaged in providing luxury water transportation (determined under the principles of subsection (m)). In the case of the employee, the exception of subparagraph (A) shall not apply to expenses described in subparagraph (B).
In the case of any expenses for food or beverages consumed while away from home (within the meaning of section 162(a)(2)) by an individual during, or incident to, the period of duty subject to the hours of service limitations of the Department of Transportation, paragraph (1) shall be applied by substituting "80 percent" for "50 percent".
The Secretary shall prescribe such regulations as he may deem necessary to carry out the purposes of this section, including regulations prescribing whether subsection (a) or subsection (b) applies in cases where both such subsections would otherwise apply.
1 See Amendment of Section note below.
26 U.S.C. § 274
Amendment of Section Pub. L. 115-97, §13304(d), (e)(2), Dec. 22, 2017, 131 Stat. 2126, provided that, applicable to amounts incurred or paid after Dec. 31, 2025, this section is amended by redesignating subsection (o) as (p) and adding the following new subsection (o):
(o) Meals provided at convenience of employerNo deduction shall be allowed under this chapter for-(1) any expense for the operation of a facility described in section 132(e)(2), and any expense for food or beverages, including under section 132(e)(1), associated with such facility, or (2) any expense for meals described in section 119(a). See 2017 Amendment note below.
EDITORIAL NOTES
REFERENCES IN TEXTSection 16 of the Securities Exchange Act of 1934, referred to in subsec. (e)(2)(B)(ii), is classified to section 78p of Title 15, Commerce and Trade. Section 212(a)(1)(A) of the Caribbean Basin Economic Recovery Act, referred to in subsec. (h)(6)(B), is classified to section 2702(a)(1)(A) of Title 19, Customs Duties.
AMENDMENTS2020-Subsec. (n)(2)(D). Pub. L. 116-260 added subpar. (D).2017-Subsec. (a). Pub. L. 115-97, §13304(c)(1)(A), substituted "recreation, or qualified transportation fringes" for "or recreation" in heading.Subsec. (a)(1). Pub. L. 115-97, §13304(a)(1)(B), struck out concluding provisions which read as follows: "In the case of an item described in subparagraph (A), the deduction shall in no event exceed the portion of such item which meets the requirements of subparagraph (A)."Subsec. (a)(1)(A). Pub. L. 115-97, §13304(a)(1)(A), struck out "unless the taxpayer establishes that the item was directly related to, or, in the case of an item directly preceding or following a substantial and bona fide business discussion (including business meetings at a convention or otherwise), that such item was associated with, the active conduct of the taxpayer's trade or business," after "or recreation,".Subsec. (a)(2)(C). Pub. L. 115-97, §13304(a)(1)(C), struck out subpar. (C) which read as follows: "In the case of a club, paragraph (1)(B) shall apply unless the taxpayer establishes that the facility was used primarily for the furtherance of the taxpayer's trade or business and that the item was directly related to the active conduct of such trade or business."Subsec. (a)(4). Pub. L. 115-97, §13304(c)(1)(B), added par. (4).Subsec. (d). Pub. L. 115-97, §13304(a)(2)(A) (ii), in concluding provisions, struck out ", entertainment, amusement, recreation, or use of the facility or property," after "travel" and substituted "(D) the business relationship to the taxpayer of the person receiving the benefit" for "(D) the business relationship to the taxpayer of persons entertained, using the facility or property, or receiving the gift".Subsec. (d)(2) to (4). Pub. L. 115-97, §13304(a)(2)(A)(i), redesignated pars. (3) and (4) as (2) and (3), respectively, and struck out former par. (2) which read as follows: "for any item with respect to an activity which is of a type generally considered to constitute entertainment, amusement, or recreation, or with respect to a facility used in connection with such an activity,".Subsec. (j)(3)(A). Pub. L. 115-97, §13310(a), designated text of subpar. (A) as cl. (i) and inserted heading, redesignated former cls. (i) to (iii) as subcls. (I) to (III), respectively, of cl. (i), and added cl. (ii). Subsec. (l). Pub. L. 115-97, §13304(a)(2)(B), (c)(2), added subsec. (l) and struck out former subsec. (l) which related to additional limitations on entertainment tickets.Subsec. (n). Pub. L. 115-97, §13304(a)(2)(C), struck out "and entertainment" after "meal" in heading.Subsec. (n)(1). Pub. L. 115-97, §13304(a)(2)(D), amended par. (1) generally. Prior to amendment, par. (1) related to amount allowable as a deduction for meal and entertainment expenses.Subsec. (n)(2). Pub. L. 115-97, §13304(a)(2)(E) (iv), (b)(4), successively amended last sentence of concluding provisions, resulting in substitution of "in subparagraph (B)" for "in subparagraph (D)". Pub. L. 115-97, §13304(a)(2)(E) (iii), (b)(3), which directed amendment of the "last sentence" of par. (2) by first substituting "of subparagraph (D)" for "of subparagraph (E)" and then "of subparagraph (C)" for "of subparagraph (D)", were executed by making both substitutions in the first sentence of the concluding provisions, to reflect the probable intent of Congress. Subsec. (n)(2)(B). Pub. L. 115-97, §13304(b)(1), (2), redesignated subpar. (C) as (B) and struck out former subpar. (B) which read as follows: "such expense is excludable from the gross income of the recipient under section 132 by reason of subsection (e) thereof (relating to de minimis fringes),". Pub. L. 115-97, §13304(a)(2)(E)(i), struck out "in the case of an expense for food or beverages," before "such expense".Subsec. (n)(2)(C). Pub. L. 115-97, §13304(b)(2), redesignated subpar. (D) as (C). Former subpar. (C) redesignated (B). Pub. L. 115-97, §13304(a)(2)(E) (ii), redesignated subpar. (D) as (C) and struck out former subpar. (C) which read as follows: "such expense is covered by a package involving a ticket described in subsection (l)(1)(B),".Subsec. (n)(2)(D), (E). Pub. L. 115-97, §13304(a)(2)(E) (ii), redesignated subpar. (E) as (D). Former subpar. (D) redesignated (C).Subsecs. (o), (p). Pub. L. 115-97, §13304(d), added subsec. (o) and redesignated former subsec. (o) as (p).2014-Subsec. (n)(3). Pub. L. 113-295 struck out subpar. (A) designation and heading, substituted "substituting '80 percent' for" for "substituting 'the applicable percentage' for", and struck out subpar. (B) which listed the applicable percentage for taxable years 1998 to 2008 or thereafter.2005-Subsec. (e)(2)(B)(ii). Pub. L. 109-135, §403 (mm)(1), (2), inserted "or a related party to the taxpayer" after "with respect to the taxpayer" in subcl. (I), "(or such related party)" after "the taxpayer" in subcl. (II), and "For purposes of this clause, a person is a related party with respect to another person if such person bears a relationship to such other person described in section 267(b) or 707(b)." at end.2004-Subsec. (e)(2). Pub. L. 108-357 reenacted heading without change and amended text generally. Prior to amendment, text read as follows: "Expenses for goods, services, and facilities, to the extent that the expenses are treated by the taxpayer, with respect to the recipient of the entertainment, amusement, or recreation, as compensation to an employee on the taxpayer's return of tax under this chapter and as wages to such employee for purposes of chapter 24 (relating to withholding of income tax at source on wages)."1997-Subsec. (n)(3). Pub. L. 105-34 added par. (3).1993-Subsec. (a)(3). Pub. L. 103-66, §13210(a), added par. (3). Subsec. (e)(4). Pub. L. 103-66, §13210(b), inserted at end "This paragraph shall not apply for purposes of subsection (a)(3)." Subsec. (m)(3). Pub. L. 103-66, §13272(a), added par. (3).Subsec. (n). Pub. L. 103-66, §13209(a), (b), substituted "50" for "80" in heading and in concluding provisions of par. (1).1990-Subsec. (l)(2). Pub. L. 101-508, §11802(b)(1), in amending par. (2) generally, struck out "(A) In general" and subpar. (B) which provided for phasein deductions of skybox tickets in the 1987 and 1988 taxable years.Subsec. (n)(2). Pub. L. 101-508, §11802(b)(2)(A) (ii), (iii), substituted "described in subparagraph (D)" for "described in subparagraph (E)" and "of subparagraph (E)" for "of subparagraph (F)" in concluding provisions.Subsec. (n)(2)(D) to (F). Pub. L. 101-508, §11802(b)(2)(A)(i), redesignated subpars. (E) and (F) as (D) and (E), respectively, and struck out former subpar. (D) which read as follows: "in the case of an expense for food or beverages before January 1, 1989, such expense is an integral part of a qualified meeting,". Subsec. (n)(3). Pub. L. 101-508, §11802(b)(2)(B), struck out par. (3) "Qualified meeting" which read as follows: "For purposes of paragraph (2)(D), the term 'qualified meeting' means any convention, seminar, annual meeting, or similar business program with respect to which- "(A) an expense for food or beverages is not separately stated,"(B) more than 50 percent of the participants are away from home,"(C) at least 40 individuals attend, and"(D) such food and beverages are part of a program which includes a speaker."1989-Subsec. (n)(2). Pub. L. 101-239, §7816(a), added a new subpar. (E), substantially identical to former subpar. (E), and moved sentence formerly appearing between subpars. (E) and (F) to end of concluding provisions after subpar. (F). Subsec. (n)(2)(F)(i). Pub. L. 101-239, §7841(d) (18), inserted "any" before "Federal law".1988-Subsec. (b)(1). Pub. L. 100-647, §1018(u)(2), related to execution of amendment by Pub. L. 99-514, §122(c)(2), see 1986 Amendment note below. Subsec. (h)(1), (2). Pub. L. 100-647, §1001(g)(5), substituted "trade or business and that" for "trade or business that". Subsec. (k)(2). Pub. L. 100-647, §1001(g)(2), amended par. (2) generally. Prior to amendment, par. (2) read as follows: "Paragraph (1) shall not apply to any expense if subsection (a) does not apply to such expense by reason of paragraph (2), (3), (4), (7), (8), or (9) of subsection (e)."Subsec. (m)(1)(B)(ii). Pub. L. 100-647, §1001(g)(3), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: "any expense to which subsection (a) does not apply by reason of paragraph (2), (3), (4), (7), (8), or (9) of subsection (e)." Subsec. (n)(2). Pub. L. 100-647, §6003(a), struck out "or" at end of subpar. (D), substituted ", or" for the period at end of subpar. (E), and added subpar. (F) and flush sentence at end.Pub. L. 100-647, §1001(g)(4)(A), struck out "or" at end of subpar. (C), substituted ", or" for the period at end of subpar. (D), and added subpar. (E) and flush sentence at end.Pub. L. 100-647, §1001(g)(1), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: "subsection (a) does not apply to such expense by reason of paragraph (2), (3), (4), (7), (8), or (9) of subsection (e),". 1986-Subsec. (b)(1). Pub. L. 99-514, §122(c)(1)-(3), and Pub. L. 100-647, §1018(u)(2), made conforming amendments to subpars. (A) and (B) and struck out subpar. (C) which read as follows: "an item of tangible personal property which is awarded to an employee by reason of length of service, productivity, or safety achievement, but only to the extent that-"(i) the cost of such item to the taxpayer does not exceed $400, or "(ii) such item is a qualified plan award."Subsec. (b)(3). Pub. L. 99-514, §122(c)(4), struck out par. (3) relating to qualified plan award, defining such term in subpar. (A), and providing for average amount of awards in subpar. (B) and maximum amount per item in subpar. (C).Subsec. (e)(1). Pub. L. 99-514, §142(a)(2)(A), redesignated par. (2) as (1) and struck out former par. (1), business meals, which read as follows: "Expenses for food and beverages furnished to any individual under circumstances which (taking into account the surroundings in which furnished, the taxpayer's trade, business, or income-producing activity and the relationship to such trade, business, or activity of the persons to whom the food and beverages are furnished) are of a type generally considered to be conducive to a business discussion." Subsec. (e)(2). Pub. L. 99-514, §142(a)(2)(A), redesignated par. (3) as (2). Former par. (2) redesignated (1).Subsec. (e)(3). Pub. L. 99-514, §142(a)(2), redesignated par. (4) as (3) and substituted "paragraph (2)" for "paragraph (3)" in subpar. (A). Former par. (3) redesignated (2). Subsec. (e)(4). Pub. L. 99-514, §1114(b)(6), which directed the substitution of "highly compensated employees (within the meaning of section 414(q))" for "officers, shareholders or other owners, or highly compensated employees" in par. (5) was executed to par. (4) to reflect the probable intent of Congress, in view of the redesignation of par. (5) as (4) by section 142(a)(2)(A) of Pub. L. 99-514.Pub. L. 99-514, §142(a)(2)(A), redesignated par. (5) as (4). Former par. (4) redesignated (3).Subsec. (e)(5) to (10). Pub. L. 99-514, §142(a)(2)(A), redesignated pars. (5) to (10) as pars. (4) to (9), respectively.Subsec. (h). Pub. L. 99-514, §142(c), struck out "or 212" after "section 162" in introductory provisions of pars. (1), (2), and (5), in closing provisions of par. (2), and in par. (4)(A), struck out "or to an activity described in section 212 and" after "active conduct of his trade or business" in introductory provisions of pars. (1) and (2), and added par. (7).Subsec. (j). Pub. L. 99-514, §122(d), added subsec. (j). Former subsec. (j) redesignated (k). Subsec. (k). Pub. L. 99-514, §142(a)(1), added subsec. (k). Former subsec. (k) redesignated (o).Subsecs. (l) to (n). Pub. L. 99-514, §142(b), added subsecs. (l) to (n). Subsec. (o). Pub. L. 99-514, §142(a)(1), redesignated former subsec. (k) as (o).1985-Subsec. (d). Pub. L. 99-44, §2(a), inserted at end "This subsection shall not apply to any qualified nonpersonal use vehicle (as defined in subsection (i))." Pub. L. 99-44, §1(a), substituted "adequate records or by sufficient evidence corroborating the taxpayer's own statement" for "adequate contemporaneous records", and provided that the Internal Revenue Code of 1954 [now 1986] [this title] shall be applied as if "contemporaneous" had not been added to subsec. (d). See Effective Date of 1985 Amendment note below.Subsecs. (i), (j). Pub. L. 99-44, §2(b), added subsec. (i) and redesignated former subsec. (i) as (j). 1984-Subsec. (d). Pub. L. 98-369, §179(b), substituted, in introductory provisions, "No deduction or credit" for "No deduction" and, in provisions following par. (4), "adequate contemporaneous records" for "adequate records or by sufficient evidence corroborating his own statement" and "the facility or property" for "the facility" in two places, and added par. (4).Subsec. (h)(6)(D). Pub. L. 98-369, §801(c), substituted in heading "with other provisions" for "with section 6103" and in text inserted provision that the Secretary may exercise his authority under subchapter A of chapter 78 to carry out any obligations of the United States under an agreement referred to in subpar. (C). 1983-Subsec. (e)(3). Pub. L. 98-67, §102(a), repealed amendments made by Pub. L. 97-248. See 1982 Amendment note below.Subsec. (h)(2). Pub. L. 97-424, §543(a)(1), inserted provisions relating to requirements of par. (5) and the description in section 212, and inserted the $2,000 limit relating to section 162 or 212.Subsec. (h)(5). Pub. L. 97-424, §543(a)(2), added par. (5).Subsec. (h)(6). Pub. L. 98-67, §227(a), added par. (6).1982-Subsec. (e)(3). Pub. L. 97-248 provided that, applicable to payments of interest, dividends, and patronage dividends paid or credited after June 30, 1983, par. (3) is amended by inserting "subchapter A of" before "chapter 24". Section 102(a), (b) of Pub. L. 98-67, title I, Aug. 5, 1983, 97 Stat. 369, repealed subtitle A (§§301-308) of title III of Pub. L. 97-248 as of the close of June 30, 1983, and provided that the Internal Revenue Code of 1954 [now 1986] [this title] shall be applied and administered (subject to certain exceptions) as if such subtitle A (and the amendments made by such subtitle A) had not been enacted.1981-Subsec. (b)(1)(C). Pub. L. 97-34, §265(a), excluded from term "gift" an award for productivity, designated existing provisions as cl. (i), and as so designated, increased the limitation to $400 from $100, and added cl. (ii).Subsec. (b)(3). Pub. L. 97-34, §265(b), added par. (3). 1980-Subsec. (a)(2)(C). Pub. L. 96-222, §103(a)(10)(A), struck out "country" after "the case of a". Subsec. (e)(10). Pub. L. 96-605 and Pub. L. 96-598 made identical amendments by adding par. (10).Subsec. (h) Pub. L. 96-608 substituted provision disallowing any deductions for expenses allocable to a convention, seminar, or other similar meeting outside the North American area unless, taking certain factors into account, it is as reasonable for the meeting to be held outside the North American area as within it, disallowing any deductions for a convention, seminar, or similar meeting held on any cruise ship, and defining North American area and cruise ship, for provision allowing deductions with respect to not more than 2 foreign conventions per year, limiting deductible transportation cost to not to exceed the cost of coach or economy air fare, permitting transportation costs to be fully deductible only if at least one-half of the days are devoted to business related activities, disallowing deductions for subsistence expenses unless the individual attends two-thirds of the business activities, limiting deductible subsistence costs to not to exceed the per diem rate for United States civil servants, defining foreign convention and subsistence expenses, providing that if transportation expenses or subsistence expenses are not separately stated or do not reflect the proper allocation all amounts paid be treated as subsistence expenses, and prescribing special reporting and substantiation requirements. 1978-Subsec. (a)(1). Pub. L. 95-600, §361(a), substituted provisions allowing no deduction for expenses paid or incurred with respect to a facility which is used in conjunction with an activity which is of a type generally considered to constitute entertainment, amusement, or recreation for provisions allowing a deduction for expenses paid or incurred with respect to a facility if the facility used is primarily for the furtherance of the taxpayer's business, and the expense is "directly related" to the active conduct of taxpayer's business.Subsec. (a)(2)(C). Pub. L. 95-600, §361(b), as amended by Pub. L. 96-222, §103(a)(10)(B), added subpar. (C).Subsec. (h)(3). Pub. L. 95-600, §701(g)(3), substituted "at least one-half" for "more than one-half" in first sentence.Subsec. (h)(6)(D). Pub. L. 95-600, §701(g)(1), designated existing provisions as cl. (i), inserted introductory phrase "Except as provided in clause (ii)" and substituted "For the purposes" for "For purpose", and added cl. (ii).Subsec. (h)(6)(E). Pub. L. 95-600, §701(g)(2), added subpar. (E). 1976-Subsecs. (c)(1), (d). Pub. L. 94-455, §1906(b)(13)(A), struck out "or his delegate" after "Secretary". Subsec. (h). Pub. L. 94-455, §602(a), added subsec. (h). Former subsec. (h) redesignated (i).Subsec. (i). Pub. L. 94-455, §§602(a), 1906(b)(13)(A), redesignated former subsec. (h) as (i) and struck out "or his delegate" after "Secretary". 1964-Subsec. (c). Pub. L. 88-272 limited subsec. (c) to individuals traveling outside the United States.
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2020 AMENDMENT Pub. L. 116-260, div. EE, title II, §210(b), Dec. 27, 2020, 134 Stat. 3066, provided that: "The amendments made by this section [amending this section] shall apply to amounts paid or incurred after December 31, 2020."
EFFECTIVE DATE OF 2017 AMENDMENT Pub. L. 115-97, §13304(e), Dec. 22, 2017, 131 Stat. 2126, provided that:"(1) IN GENERAL.-Except as provided in paragraph (2), the amendments made by this section [amending this section and section 7701 of this title] shall apply to amounts incurred or paid after December 31, 2017."(2) EFFECTIVE DATE FOR ELIMINATION OF DEDUCTION FOR MEALS PROVIDED AT CONVENIENCE OF EMPLOYER.-The amendments made by subsection (d) [amending this section] shall apply to amounts incurred or paid after December 31, 2025." Pub. L. 115-97, §13310(b), Dec. 22, 2017, 131 Stat. 2132, provided that: "The amendments made by this section [amending this section] shall apply to amounts paid or incurred after December 31, 2017."
EFFECTIVE DATE OF 2014 AMENDMENT Amendment by Pub. L. 113-295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113-295, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 2005 AMENDMENT Amendments by Pub. L. 109-135 effective as if included in the provisions of the American Jobs Creation Act of 2004, Pub. L. 108-357, to which they relate, see section 403(nn) of Pub. L. 109-135, set out as a note under section 26 of this title.
EFFECTIVE DATE OF 2004 AMENDMENT Pub. L. 108-357, §907(b), Oct. 22, 2004, 118 Stat. 1655, provided that: "The amendment made by this section [amending this section] shall apply to expenses incurred after the date of the enactment of this Act [Oct. 22, 2004]."
EFFECTIVE DATE OF 1997 AMENDMENT Pub. L. 105-34, §969(b), Aug. 5, 1997, 111 Stat. 897, provided that: "The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 1997."
EFFECTIVE DATE OF 1993 AMENDMENT Pub. L. 103-66, §13209(c), Aug. 10, 1993, 107 Stat. 469, provided that: "The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1993." Pub. L. 103-66, §13210(c), Aug. 10, 1993, 107 Stat. 469, provided that: "The amendments made by this section [amending this section] shall apply to amounts paid or incurred after December 31, 1993." Pub. L. 103-66, §13272(b), Aug. 10, 1993, 107 Stat. 542, provided that: "The amendment made by this section [amending this section] shall apply to amounts paid or incurred after December 31, 1993."
EFFECTIVE DATE OF 1989 AMENDMENT Amendment by section 7816(a) of Pub. L. 101-239 effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, to which such amendment relates, see section 7817 of Pub. L. 101-239, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1988 AMENDMENT Amendment by section 1001(g)(1)-(4)(A), (5) of Pub. L. 100-647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99-514, to which such amendment relates, see section 1019(a) of Pub. L. 100-647, set out as a note under section 1 of this title.Pub. L. 100-647, title VI, §6003(b), Nov. 10, 1988, 102 Stat. 3685, provided that:"(1) Clauses (i) and (ii) of section 274(n)(2)(F) [now 274(n)(2)(C)] of the 1986 Code, as added by subsection (a), shall apply to taxable years beginning after December 31, 1988."(2) Clauses (iii) and (iv) of section 274(n)(2)(F) [now 274(n)(2)(C)] of the 1986 Code, as added by subsection (a), shall apply to taxable years beginning after December 31, 1987."
EFFECTIVE DATE OF 1986 AMENDMENT Amendment by section 122(c), (d) of Pub. L. 99-514 applicable to prizes and awards granted after Dec. 31, 1986, see section 151(c) of Pub. L. 99-514, set out as a note under section 1 of this title. Amendment by section 142(a)-(c) of Pub. L. 99-514 applicable to taxable years beginning after Dec. 31, 1986, see section 151(a) of Pub. L. 99-514, set out as a note under section 1 of this title. Amendment by section 1114(b)(6) of Pub. L. 99-514 applicable to years beginning after Dec. 31, 1986, see section 1114(c)(1) of Pub. L. 99-514, set out as a note under section 414 of this title.
EFFECTIVE DATE OF 1985 AMENDMENT Pub. L. 99-44, §6(a)-(c), May 24, 1985, 99 Stat. 78, 79, as amended by Pub. L. 99-514, §2, Oct. 22, 1986, 100 Stat. 2095, provided that:"(a) REPEALS.-The amendment and repeals made by subsections (a) and (b) of section 1 [amending this section and repealing section 179(b)(2), (3) of Pub. L. 98-369 which had amended sections 6653 and 6695 of this title] shall take effect as if included in the amendments made by section 179(b) of the Tax Reform Act of 1984 [Pub. L. 98-369]. "(b) RESTORATION OF PRIOR LAW FOR 1985.-For taxable years beginning in 1985, section 274(d) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall apply as it read before the amendments made by section 179(b)(1) of the Tax Reform Act of 1984 [Pub. L. 98-369, see 1984 Amendments note above]."(c) EXCEPTION FROM SUBSTANTIATION REQUIREMENTS FOR QUALIFIED NONPERSONAL USE VEHICLES.-The amendments made by section 2 [amending this section] shall apply to taxable years beginning after December 31, 1985."
EFFECTIVE DATE OF 1984 AMENDMENT Amendment by section 179(b)(1) of Pub. L. 98-369 applicable to taxable years beginning after Dec. 31, 1984, see section 179(d)(2) of Pub. L. 98-369, set out as an Effective Date note under section 280F of this title. Amendment by section 801(c) of Pub. L. 98-369 applicable to transactions after Dec. 31, 1984, in taxable years ending after such date, see section 805(a)(1) of Pub. L. 98-369, as amended, set out as a note under section 245 of this title.
EFFECTIVE DATE OF 1983 AMENDMENT Pub. L. 98-67, title II, §222(b), Aug. 5, 1983, 97 Stat. 397, provided that: "The amendment made by subsection (a) [amending this section] shall apply to conventions, seminars, or other meetings which begin after June 30, 1983."Pub. L. 97-424, title V, §543(b), Jan. 6, 1983, 96 Stat. 2196, provided that: "The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1982."
EFFECTIVE DATE OF 1981 AMENDMENT Pub. L. 97-34, title II, §265(c), Aug. 13, 1981, 95 Stat. 265, provided that: "The amendments made by this section [amending this section] shall apply to taxable years ending on or after the date of the enactment of this Act [Aug. 13, 1981]."
EFFECTIVE DATE OF 1980 AMENDMENT Pub. L. 96-608, §4(b), Dec. 28, 1980, 94 Stat. 3552, as amended by Pub. L. 99-514, §2, Oct. 22, 1986, 100 Stat. 2095, provided that: "The amendment made by subsection (a) of this section [amending this section] shall apply to conventions, seminars, and meetings beginning after December 31, 1980, except that in the case of any convention, seminar, or meeting beginning after such date which was scheduled on or before such date, a person, in such manner as the Secretary of the Treasury or his delegate may prescribe, may elect to have the provisions of section 274(h) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] be applied to such convention seminar or meeting without regard to such amendment."Pub. L. 96-598, §5(b), Dec. 24, 1980, 94 Stat. 3488, and Pub. L. 96-605, title I, §108(b), Dec. 28, 1980, 94 Stat. 3525, provided that: "The amendment made by this section [amending this section] shall apply to any expenses paid or incurred after December 31, 1980, in taxable years ending after such date." Amendment by Pub. L. 96-222 effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978, Pub. L. 95-600, to which such amendment relates, see section 201 of Pub. L. 96-222, set out as a note under section 32 of this title.
EFFECTIVE DATE OF 1978 AMENDMENT Pub. L. 95-600, title III, §361(c), Nov. 6, 1978, 92 Stat. 2847, provided that: "The amendments made by this section [amending this section] shall apply to items paid or incurred after December 31, 1978, in taxable years ending after such date."Pub. L. 95-600, title VII, §701(g)(4), Nov. 6, 1978, 92 Stat. 2904, provided that: "The amendments made by this subsection [amending this section] shall apply to conventions beginning after December 31, 1976."
EFFECTIVE DATE OF 1976 AMENDMENT Pub. L. 94-455, title VI, §602(b), Oct. 4, 1976, 90 Stat. 1574, provided that: "The amendments made by this section [amending this section] shall apply to conventions beginning after December 31, 1976."
EFFECTIVE DATE OF 1964 AMENDMENT Pub. L. 88-272, title II, §217(b), Feb. 26, 1964, 78 Stat. 57, provided that: "The amendment made by subsection (a) [amending this section] shall apply with respect to taxable years ending after December 31, 1962, but only in respect of periods after such date."
EFFECTIVE DATESection applicable with respect to taxable years ending after Dec. 31, 1962, but only in respect of periods after such date, see section 4(c) of Pub. L. 87-834, set out as an Effective Date of 1962 Amendment note under section 162 of this title.
REGULATIONSSecretary of the Treasury or his delegate to issue before Feb. 1, 1988, final regulations to carry out amendments made by section 1114 of Pub. L. 99-514, see section 1141 of Pub. L. 99-514, set out as a note under section 401 of this title. Pub. L. 99-44, §5, May 24, 1985, 99 Stat. 78, provided that: "Not later than October 1, 1985, the Secretary of the Treasury or his delegate shall prescribe regulations to carry out the provisions of this Act [amending sections 274, 280F, 3402, 6653, and 6695 of this title, and enacting provisions set out as notes under sections 274, 280F, 3402, and 6653 of this title] which shall fully reflect such provisions."Pub. L. 99-44, §1(c), May 24, 1985, 99 Stat. 77, provided that: "Regulations issued before the date of the enactment of this Act [May 24, 1985] to carry out the amendments made by paragraphs (1)(C), (2), and (3) of section 179(b) of the Tax Reform Act of 1984 [Pub. L. 98-369, amending sections 274, 6653, and 6695 of this title] shall have no force and effect."
SAVINGS PROVISIONFor provisions that nothing in amendment by Pub. L. 101-508 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Nov. 5, 1990, for purposes of determining liability for tax for periods ending after Nov. 5, 1990, see section 11821(b) of Pub. L. 101-508, set out as a note under section 45K of this title.
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§1101-1147 and 1171-1177] or title XVIII [§§1800-1899A] of Pub. L. 99-514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99-514, as amended, set out as a note under section 401 of this title.
CERTAIN RECORDKEEPING REQUIREMENTS For treatment of use of automobile by I.R.S. special agent for purposes of this section and section 132 of this title, see section 1567 of Pub. L. 99-514, set out as a note under section 132 of this title.
SUBSTANTIATION BY ADEQUATE CONTEMPORANEOUS RECORDSPub. L. 99-44, §1(a), May 24, 1985, 99 Stat. 77, as amended by Pub. L. 99-514, §2, Oct. 22, 1986, 100 Stat. 2095, provided in part that: "the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall be applied and administered as if the word 'contemporaneous' had not been added [by Pub. L. 98-369] to such subsection (d) [subsec. (d) of this section]."
USE OF FACILITIES IN CASE OF INDEPENDENT CONTRACTORS, ETC.Pub. L. 96-222, title I, §103(a)(10)(C), Apr. 1, 1980, 94 Stat. 212, as amended by Pub. L. 99-514, §2, Oct. 22, 1986, 100 Stat. 2095, provided that:"(i) IN GENERAL.-Subsection (a) of section 274 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to disallowance of certain entertainment, etc., expenses) shall not apply to expenses paid or incurred by the taxpayer for goods, services, and facilities to the extent that the expenses are includible in the gross income of a recipient of the entertainment, amusement, or recreation who is not an employee of the taxpayer as compensation for services rendered or as a prize or award under section 74 of such Code."(ii) INFORMATION RETURN REQUIREMENT.-Clause (i) shall not apply to any amount paid or incurred by the taxpayer if such amount is required to be included in any information return filed by such taxpayer under part III of subchapter A of chapter 61 of such Code [section 6031 et seq. of this title] and is not so included."(iii) APPLICATION OF SUBPARAGRAPH.-This subparagraph shall only apply with respect to expenses paid or incurred during 1979 or 1980."
EXECUTIVE DOCUMENTS
TERMINATION OF TRUST TERRITORY OF THE PACIFIC ISLANDSFor termination of Trust Territory of the Pacific Islands, see note set out preceding section 1681 of Title 48, Territories and Insular Possessions.
- Internal Revenue Code of 1986
- The term "Internal Revenue Code of 1986" means this title, and the term "Internal Revenue Code of 1939" means the Internal Revenue Code enacted February 10, 1939, as amended.
- Secretary of the Treasury
- The term "Secretary of the Treasury" means the Secretary of the Treasury, personally, and shall not include any delegate of his.
- Secretary
- The term "Secretary" means the Secretary of the Treasury or his delegate.
- person
- The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
- shareholder
- The term "shareholder" includes a member in an association, joint-stock company, or insurance company.
- taxable year
- The term "taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the taxable income is computed under subtitle A. "Taxable year" means, in the case of a return made for a fractional part of a year under the provisions of subtitle A or under regulations prescribed by the Secretary, the period for which such return is made.
- taxpayer
- The term "taxpayer" means any person subject to any internal revenue tax.
- trade or business
- The term "trade or business" includes the performance of the functions of a public office.
- transaction
- The term "transaction" includes a series of transactions.