The Internal Revenue Service issued Revenue Ruling 2008-23, published in the Internal Revenue Bulletin 2008-18, which explains how to apply the limitation on the deduction from meals and incidental expenses (M&IE) incurred by an employee truck driver when the driver is furnished to a motor carrier by an employee leasing company.
The IRS hypothesizes that a driver properly accounts for the M&IE, so is not involved as far as the limitation goes. To determine if the carrier or the leasing company is subject to the limitation, the ruling concludes that the criteria are:
If both criteria are met – and the second is met even if the driver accounts for his expenses in the first instance to the carrier rather than the leasing company – the limitation applies to the carrier, so the carrier bears the M&IE costs in these circumstances.
If neither criterion is present, or only one, the leasing company is subject to the limitation. IRS emphasizes that it makes no difference whether the driver is the common-law employee of the carrier or of the leasing company.
