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Tax-Work Expenses
Petitioners now claim entitlement to deduct $720 as tax-work
(audit) expenses for 1989. Most of these expenses are for travel
to petitioners' attorney's office and related activities for
earlier years. Respondent argues that petitioners did not
substantiate mileage expenses as required by section 274(d).2 We
agree with respondent; accordingly, we sustain respondent's
disallowance of the deduction for tax-work (audit) expenses.
Schedule C Expenses
Petitioners originally claimed a $9,763 Schedule C business
loss for 1989, that resulted from their claiming $11,540 in
business expenses and $1,778 in income. The statutory notice
disallowed $9,361 of the expenses claimed as a section 179
deduction.3 On their original 1989 return, petitioners claimed
$12,860 in expenses relating to the business of Mr. Martin. On
their amended 1989 return, petitioners claimed $12,860 in expenses
relating to the business of Mr. Martin and $8,914 in expenses
2 The requirements imposed by sec. 274(d) are in addition
to those of sec. 162. Furthermore, in the case of travel
expenses, sec. 274(d) overrides the Court's ability to
approximate a taxpayer's allowable expenses under the Cohan
doctrine. Sanford v. Commissioner, 50 T.C. 823, 826-828 (1968),
affd. per curiam 412 F.2d 201 (2d Cir. 1969).
3 Sec. 179(a), in general, allows a taxpayer to elect to
expense the cost of certain property (known as sec. 179 property)
for the taxable year in which the property is placed in service.
In general, sec. 179 property is tangible property used in the
active conduct of a taxpayer's trade or business that would be
subject to depreciation but for the election.
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