- 7 -
legitimate and deductible. The taxpayer, however, did not
produce any of the receipts substantiating such expenses. The
Court of Appeals directed the Board of Tax Appeals to estimate
such expenses "bearing heavily if it chooses upon the taxpayer
whose inexactitude is of his own making". Id. at 544.
Section 274(d) overrides the Cohan doctrine with respect to
expenses of travel away from home (including meals and lodging)
and entertainment. Sanford v. Commissioner, 50 T.C. 823, 827
(1968), affd. per curiam 412 F.2d 201 (2d Cir. 1969); sec. 1.274-
5T(a), Temporary Income Tax Regs., 50 Fed. Reg. 46014 (Nov. 6,
1985). Under section 274(d), a taxpayer must substantiate the
amount, time, place, and business purpose of the expenditures and
furnish adequate records or sufficient evidence corroborating his
own statement. Sec. 1.274-5T(c)(1), Temporary Income Tax Regs.,
50 Fed. Reg. 46016 (Nov. 6, 1985). Adequate records are defined
as an account book, diary, log, statement of expense, trip
sheets, or similar records, plus "documentary evidence". Sec.
1.274-5T(c)(2), Temporary Income Tax Regs., 50 Fed. Reg. 46017
(Nov. 6, 1985). Examples of documentary evidence include
receipts, paid bills, or similar evidence to support an
expenditure, except that, with respect to any expenditure of less
than $25 incurred prior to October 1, 1995, or transportation
charges "documentary evidence will not be required if not readily
available, provided, however, that the Commissioner in his
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011