- 15 -
With regard to the $2,880 in travel expenses and the $1,662
in meal and entertainment expenses that are still in dispute for
1991, the standard of proof for business travel and for business-
related meal and entertainment expenses is higher than the
standard of proof for other business expenses. Under section
274(d), deductions for business travel and business-related meal
and entertainment expenses are not allowable on the basis of
estimates and unsupported testimony of taxpayers. At a minimum,
taxpayer's records must show: (1) The amount of such expenses;
(2) the time and place such expenses were incurred; and (3) the
business purpose for which such expenses were incurred. Sec.
274(d).
Petitioner has failed to meet the level of substantiation
required for the claimed business travel and business-related
meal and entertainment expenses that are in dispute for 1991.
Petitioner did not present any receipts or underlying records
relating to these expenses. Mere entries on the computer
spreadsheets for "travel" and "meals/entertainment" do not
satisfy the substantiation requirements of section 274(d). We
sustain respondent's disallowance of the claimed travel, meal,
and entertainment expenses for 1991.
With regard to the additions to tax, under section 6662(a),
a 20 percent accuracy-related penalty is applicable to an
underpayment of tax attributable to either negligence or to a
disregard of rules or regulations (section 6662(b)(1)).
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011