Prosman (P) was employed as a computer consultant employed by Command. P bid on different projects using a standard hourly rate and a per diem allowance. P included a per diem allowance amount in his bid because most of his projects were out of town. P also requested that Command separate his per diem amounts from his base rate. Command refused and included both amounts as wages in P’s 1995 W-2. P reported an adjusted gross income of $83,143 and then deducted the expenses. There was no dispute that P incurred the expenses as claimed on his 1995 return. The Commissioner determined that P was subject to AMT and determined a deficiency of $2,688.

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