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No attempt has been made to show that claimed travel and
entertainment expenses in any amounts greater than those allowed
by respondent were ordinary and necessary or were expended in
furtherance of CTC's business, rather than in furtherance of
Diesel Power's business or the business of other entities in
which petitioner was involved. Instead, petitioner ignores the
existence of any other entities on whose behalf he conducted
business and merely concludes that an expense was CTC related if
it was treated that way on CTC's books or by his tax return
preparers. None of petitioner's bookkeepers or return preparers
testified that they were present when any expense was incurred;
rather, petitioner simply directed how an expense was to be
treated on CTC's books. Accordingly, their testimony does
nothing to substantiate the business nature of travel and
entertainment amounts reflected on either CTC's books or
petitioner's tax returns. See Anderson v. Commissioner, T.C.
Memo. 1976-28 (testimony of bookkeeper who was not present when
expenses were incurred could not substantiate nature of claimed
travel and entertainment expenses).
In addition to the requirements that expenses be ordinary
and necessary as well as in furtherance of taxpayer's business,
section 274(d) imposes stringent substantiation criteria.
Section 274(d) prohibits a deduction for travel and entertainment
expenses unless the taxpayer substantiates by adequate records or
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