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Regs., and cannot exclude the per diem/travel amounts from their
gross income.
Deductibility of Per Diem/Travel Amounts
On brief, petitioners focused on the deductibility of the
per diem/travel amounts as ordinary and necessary travel expenses
under section 162(a)(2). Section 162(a)(2) provides:
(a) In general.--There shall be allowed as a
deduction all the ordinary and necessary expenses paid
or incurred during the taxable year in carrying on any
trade or business, including--
* * * * * * *
(2) traveling expense (including amounts
expended for meals and lodging other than amounts
which are lavish or extravagant under the
circumstances) while away from home in the pursuit
of a trade or business * * *
Therefore, for a traveling expense to be deductible, three
requirements must be satisfied: (1) The expense must be
reasonable and necessary; (2) the expense must be incurred while
away from home; and (3) the expense must be incurred in the
pursuit of business. Commissioner v. Flowers, 326 U.S. 465
(1946); Brandl v. Commissioner, 513 F.2d 697 (6th Cir. 1975),
affg. T.C. Memo. 1974-160.
Petitioners bear the burden of proving that they are
entitled to any claimed deduction. Rule 142(a); INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992). This burden includes
substantiating the amount of the item claimed. Hradesky v.
Commissioner, 65 T.C. 87, 90 (1975), affd. per curiam 540 F.2d
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