1099 Contractor expenses paid by employer: CGB asked me to repost in tax law

What is the name of your state? indiana

I was a 1099 contractor for 1/2 of 2004. When I incurred any expenses the employer paid them back to me. However when they did this they included it into my end of the year 1099. When I had my taxes done the tax preparer said that my meals and entertainment expenses, which were paid in full by the employer, were only eligible for a 50% tax deduction. Is this correct? If this is correct why does the employer pay me in full for the expenses put it into my total pay for my 1099 and then I can only claim 1/2 the expense on my return?

Thanks in advance for your help!

Yes, the company can do that. They probably have a non-accountable reimbursement plan.

I guess the IRS's logic for deducting only 50% of meals is that you had to eat anyway.