Ok - but who should be responsible for the "other 50%" that the IRS says is not deductible - MY  company (i.e. ME as a 1 man band) or the CLIENT company....

My situation is this.  I work from home, using conf calls to work on behalf of the client. They have a local office and if I travel in their, I don't charge expenses. However they also have offices in other parts of the country and they sometimes ask me to travel their to help them, and I fly out and stay in a hotel for a few days  and of course that means I eat out too. 

The reimbursement of those meals then counts as income, but only 50% of that is deductible, so my income is inflated by that extra 50% as stated elsewhere in this thread. 

Surely in this case - they fair thing would be for me to pass through 100% of the expenses to client and categorize them as 100% deductible  (to offset the apparent income from those expenses) and then the client can deal with the 50% thing because they are ultimately the company who are ultimately responsible for those meal expenses which are 50% personal and 50% business under IRS rules.