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if the taxpayer engages in some business activities at the
destination. Id. Whether travel is primarily business related
or personal is a question of fact. Sec. 1.162-2(b)(2), Income
Tax Regs. Travel expenses must also be adequately substantiated
under the provisions of section 274(d). See Fast v.
Commissioner, T.C. Memo. 1998-272.
Mr. Popov usually depended on his mother to place the ads
for him. However, since she was in the United States for 3
months, Mr. Popov had to perform that task himself. This was
also an opportune time for Mr. Popov to focus on his business and
travel to Bulgaria, since it was his summer break from law
school. Mr. Popov wanted to place ads in other newspapers
outside of Sofia and investigate setting up an office. Mr. Popov
does not have any friends remaining in Bulgaria, and from the
numerous advertisements presented at trial, it appears that Mr.
Popov did a substantial amount of work. We find that Mr. Popov’s
trip to Bulgaria was primarily business related and bore a
reasonable and proximate relationship to his Bulgarian/American
dating service. The requirements of section 274(d) have been
satisfied. Accordingly, petitioners are entitled to deduct the
travel expense of $1,180.
Accuracy-Related Penalty
Respondent determined an accuracy-related penalty under
section 6662(a). Section 6662(a) imposes a penalty of 20 percent
on any portion of an underpayment of tax that is attributable to
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