- 13 - establish that the deduction was for an ordinary and necessary business expense or was expended for the purpose designated on the 1989 tax return. The 1989 tax return indicates that petitioner claimed the deduction for vehicle expenses, travel expenses, and meal and/or entertainment expenses. Section 162(a)(2) permits a deduction for traveling expenses, including amounts expended for meals and lodging, incurred by a taxpayer while away from home in the pursuit of a trade or business. The taxpayer must demonstrate that the expenses were (1) reasonable and necessary traveling expenses, (2) incurred “while away from home”, and (3) incurred in the pursuit of business. See, e.g., Commissioner v. Flowers, 326 U.S. 465, 470 (1946). In addition, section 274(d) imposes strict substantiation requirements. Section 274(d) provides that, with certain inapplicable exceptions, no deduction for traveling expenses (or similar items) shall be allowed unless the taxpayer substantiates by adequate records or by sufficient evidence corroborating the taxpayer's own statement (A) the amount of such expense or other item, (B) the time and place of the travel, entertainment, amusement, recreation, or use of the facility or property, or the date and description of the gift, (C) the business purpose of the expense or other item, and (D) the business relationship to the taxpayer of persons entertained, using the facility or property, or receiving the gift. * * * At trial, petitioner stated that, in 1989, he maintained “tax homes” in Arlington, Texas, and Everett, Washington, while working as a contract engineer in California. Petitioner claimsPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011