Proposed regulations: Deductibility of business meal expenses

Deductibility of business meal expenses

The U.S. Treasury Department and IRS this afternoon released for publication in the Federal Register a notice of proposed rulemaking (REG-100814-19) as guidance under section 274 and regarding changes made to section 274 by the U.S. tax law enacted in 2017.


Related content

Section 274 was amended by the 2017 tax law (Pub. L. No. 115-97)—the law that is often referred to as the “Tax Cuts and Jobs Act” (TCJA). The legislative changes revised the rules for deducting expenditures for meals and entertainment, effective for amounts paid or incurred after December 31, 2017. Specifically, the 2017 law repealed deductions for entertainment, amusement, and recreation—even when directly related to the conduct of the taxpayer’s trade or business. The 50% deduction limitation for food and beverage expenses associated with a trade or business was generally retained. 

The proposed regulations [PDF 309 KB] (12 pages as published in the Federal Register):

  • Address the repeal of the deduction under section 274 for expenditures related to entertainment, amusement, or recreation activities
  • Provide guidance to determine whether an activity is of a type generally considered to be entertainment
  • Address the limitation on the deduction of food and beverage expenses under section 274(k) and (n)—including the applicability of the exceptions under section 274(e)(2), (3), (4), (7), (8), and (9)

Public hearing

The proposed regulations as originally published in the Federal Register in February 2020 provided that the date of the public hearing would be April 7, 2020. Subsequently, the date of the public hearing was changed to April 29, 2020.

Read the notice [PDF 238 KB] (March 2020) announcing this public hearing date change and also announcing that outlines of topics to be discussed at the public hearing and comments must be received by April 13, 2020.

The purpose of this report is to provide text of the proposed regulations.

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal