Okay, now I'm a little confused. Here is my scenario. My brother is an oil field worker who is paid hourly. He works seven days on and seven days off. He is paid a flat rate of $75.00 per diem only on the days he works (and does not have to provide receipts). His pay stub lists the per diem but not as taxed. His W-2 did not include his per diem amount. The locations he works vary but are mainly in the North/West Texas area. Probably the biggest city is Abilene. Now, is he going to be held accountable for taxes on all the per diem he received?

If the per diem is not taxed by the employer, then the employer has met the criteria for an accountable plan.

Thus, your brother does NOT have to pay taxes on the per diem.