SECTION 5. HIGH-LOW

SUBSTANTIATION METHOD

.01 In general . If a payor pays a per diem allowance in lieu of reimbursing actual lodging, meal, and incidental expenses incurred or to be incurred by an employee for travel away from home and the payor uses the high-low substantiation method described in this section 5 for travel within CONUS, the amount of the

Key City County or other defined location

Arizona

Phoenix/Scottsdale Maricopa (January 1-May 31)

California

Monterey Monterey (February 1-November 30) Napa Napa (May 1-October 31) Palm Springs Riverside (January 1-May 31) San Diego San Diego San Francisco San Francisco

2005–3 I.R.B. 344 January 18, 2005

Key City County or other defined location

Santa Barbara Santa Barbara Santa Monica City limits of Santa Monica South Lake Tahoe El Dorado (December 1-August 31)

Colorado

Aspen Pitkin Crested Butte City limits of Crested Butte (December 1-March 31) (Gunnison County) Silverthorne/Breckenridge Summit (December 1-March 31) Telluride San Miguel (December 1-September 30) Vail Eagle

District of Columbia

Washington D.C. (also the cities of Alexandria, Falls Church, and Fairfax, and the counties of Arlington, Loudoun, and Fairfax, in Virginia; and the counties of Montgomery and Prince George’s in Maryland) (See also Maryland and Virginia)

Delaware

Lewes Sussex (July 1-August 31)

Florida

Daytona Beach Volusia (February 1-March 31) Fort Lauderdale Broward (January 1-May 31) Key West Monroe Miami Miami-Dade (October 1-May 31) Naples Collier (January 1-March 31) Palm Beach

(October 1-May 31)

Illinois

Palm Beach (also the cities of Boca Raton, Delray Beach, Jupiter, Palm Beach Gardens, Palm Beach Shores, Singer Island and West Palm Beach)

Chicago Cook and Lake

Louisiana

New Orleans Orleans and St. Bernard Parishes (February 1-April 30 and September 1-November 30)

Maryland

(For the counties of Montgomery and Prince George’s, see District of Columbia) Baltimore Baltimore Cambridge/St. Michaels Dorchester and Talbot (June 1-August 31) Ocean City Worcester (July 1-August 31)

January 18, 2005 345 2005–3 I.R.B.

Key City County or other defined location

Massachusetts

Boston Suffolk Cambridge City limits of Cambridge Hyannis Barnstable (July 1-August 31) Martha’s Vineyard Dukes (May 1-August 31) Nantucket Nantucket

Michigan

Traverse City Grand Traverse (July 1-August 31)

New Jersey

Atlantic City Atlantic (May 1-October 31) Cape May Cape May (except Ocean City) (June 1-August 31) Ocean City City limits of Ocean City (June 1-October 31) Princeton/Trenton Mercer

New Mexico

Santa Fe Santa Fe (July 1-August 31)

New York

Carle Place/Garden City/ Glen Cove/Great Neck/ Plainview/Rockville Centre/ Syosset/Uniondale/Woodbury

Nassau

Lake Placid Essex (July 1-August 31) Manhattan Includes Richmond and the boroughs of Manhattan, Brooklyn, Queens and The Bronx

Riverhead/Ronkonkoma/ Melville

Suffolk

Tarrytown Westchester (except White Plains)

White Plains City limits of White Plains

North Carolina

Kill Devil Dare (April 1-October 31)

Pennsylvania

Hershey City limits of Hershey (May 1-August 31) Philadelphia Philadelphia

2005–3 I.R.B. 346 January 18, 2005

Key City County or other defined location

Rhode Island

Jamestown/Middletown/ Newport

Newport

(May 1-October 31) Providence Providence

South Carolina

Hilton Head Beaufort (April 1-October 31)

Utah

Park City Summit (December 1-March 31)

Virginia

(For the cities of Alexandria, Fairfax, and Falls Church, and the counties of Arlington, Fairfax, and Loudoun, see District of Columbia) Virginia Beach Cities of Virginia Beach, Norfolk, (June 1-August 31) Portsmouth, Chesapeake, and Suffolk

Washington

Seattle King (May 1-October 31)

ment that the employee substantiate the time, place, and business purpose of the expense.

.03 Federal per diem or M&IE rate . A payor is not required to reduce the federal per diem rate or the federal M&IE rate for the locality of travel for meals provided in kind, provided the payor has a reasonable belief that meal and incidental expenses were or will be incurred by the employee during each day of travel.

.04 Proration of the federal per diem or M&IE rate . Pursuant to the Federal Travel Regulations, in determining the federal per diem rate or the federal M&IE rate for the locality of travel, the full applicable federal M&IE rate is available for a full day of travel from 12:01 a.m. to 12:00 midnight. The method described in section 6.04(1) of this revenue procedure must be used for purposes of determining the amount deemed substantiated under section 4.03 or 4.05 of this revenue procedure for partial days of travel away from home. For purposes of determining the amount deemed substantiated under section 4.01, 4.02, 4.04, or 5 of this revenue procedure for partial days of travel away from home, either of the following methods may be used to prorate the federal M&IE rate to

.04 Changes to high-cost localities in Rev. Proc. 2004–60 . The list of high-cost localities in section 5.03 of this revenue procedure differs from the list of high-cost localities in section 5.03 of Rev. Proc. 2004–60 (changes listed by key cities). (1) The following locality has been added to the list of high-cost localities: Traverse City, Michigan.

(2) The portion of the year for which the following are high-cost localities has been changed: Fort Lauderdale, Florida; New Orleans, Louisiana; and Silverthorne/Breckinridge, Colorado;

(3) The following localities have been removed from the list of high-cost localities: Las Vegas, Nevada; Mackinac Island, Michigan; Myrtle Beach, South Carolina; and Tom’s River, New Jersey.

(4) The boroughs of Brooklyn, Queens, The Bronx, and Staten Island are no longer separately listed as a high-cost locality and are now combined with the borough of Manhattan.

.05 Specific limitation . (1) Except as provided in section 5.05(2) of this revenue procedure, a payor that uses the high-low substantiation method with respect to an employee must use that method for all amounts paid

to that employee for travel away from home within CONUS during the calendar year.

(2) With respect to an employee described in section 5.05(1) of this revenue procedure, the payor may reimburse actual expenses or use the meals only per diem method described in section 4.02 of this revenue procedure for any travel away from home, and may use the per diem substantiation method described in section 4.01 of this revenue procedure for any OCONUS travel away from home.