IRS Eliminates High Low Method

By July 18, 2011 Businesses

The IRS is eliminating the high low method of per diem for substantiating lodging, meal and incidental expenses incurred while traveling away from home.  The IRS will soon publish new guidance providing rules for substantiating these expenses without the high low method.

The IRS had requested public comment on the continuing need for the high-low method, but received no responses. Under the high low method, an employer could use two rates published by the IRS to substantiate travel costs instead of using CONUS rates set for over 400 locations by the General Service Administration. The CONUS rates provide travel/lodging and meals rates for every major city in the United States and around the world, while the IRS high-low rates provided a rate for high cost areas and low cost areas. While Federal offices must use the CONUS rates, private employers had the option of using the high-low rate.

Those who travel for their jobs will have to use the specific locations and local rates for all future travel deductions. The good news is that you can access this info online and there is probably even an app for that!