CCRA will revise daily meal allowance guideline: CTA

OTTAWA (April 12, 2002) — The Canadian Trucking Alliance said today it has received “reasonable assurances” that the Canada Customs and Revenue Agency will increase the $33-a-day published standard expense a truck driver can claim for meals eaten away from home.

The association said a CCRA policy committee is expected to reach a decision later this month or in early May regarding a guideline for the 2002 tax year. A spokesperson for the CCRA was not available for comment.

The $33 figure is a generally accepted standard for transport workers filing a TL2 tax form, the CCRA’s simplified method of calculating travel-related business meal expenses not verified with a receipt. The amount dates to a March 8, 1991, tax information circular stating that $11 a meal for transport workers was reasonable for 1990 and subsequent tax years. The figure has not been revised since, nor has it been put into regulation in the federal Income Tax Act. It appears only in the CCRA’s Employment and Expense Guide, distributed with income tax forms each year.

In the past, the CTA has advocated restoring the tax deductibility limit on travel-related business meals from 50% to 80%; the federal government reduced the limit in 1994. This is the first time the association, Canada’s largest trucking industry lobby group, has said it is seeking an increase in the daily meal allowance.

Among truck drivers and owner-operators, the issue has been on the front burner since August 2000, when a federal tax court judge ruled there is no reasonable basis for the $33-a-day figure in the case of a Winnipeg truck driver named Don Wilkinson. The ruling achieved more notoriety when it was reported in HighwaySTAR and Today’s Trucking magazines the following spring.

On his 1997 TL2 tax form, Wilkinson claimed $4580, based on a daily meal rate of $40, instead of the customary $33. Wilkinson, who travels two-thirds of his miles in the United States, was audited, penalized, and went before a federal tax court to appeal his case (1999-4687 (IT) I: Don J. Wilkinson v. Her Majesty the Queen). Judge Alexander Sarchuk granted Wilkinson’s claim of $40 per day minus 50%, the standard allowable deduction for travel-related business meals.

Like anyone else who works away from his employer’s place of business and who does not receive an allowance for meals, a truck driver can claim his actual meal cost provided that each expense is reasonable, itemized, and verified by a receipt. However, most truck drivers use the simplified method, which requires them to keep a travel record but not receipts for each meal.

The judge’s ruling does not establish exactly what is “reasonable” for truck drivers to claim under the simplified method; it only states that in Wilkinson’s case, $33 is not reasonable, and federal tax court rulings don’t create legal precedent. “If you challenge the $33 per diem, you may find yourself in court doing it,” said Chris Bennett of TFS Group, a financial services firm in Waterloo, Ont.

Many truckers have done just that and have been successful. More background on the Wilkinson case, including a court transcript, is available online at highwaystarmagazine.com.