5
Generally, if a claimed business expense is deductible, but
the taxpayer is unable to substantiate it, the Court is permitted
to make as close an approximation as it can. See Cohan v.
Commissioner, 39 F.2d 540 (2d Cir. 1930). The estimate must have
a reasonable evidentiary basis. See Vanicek v. Commissioner, 85
T.C. 731, 743 (1985).
Section 274(d), however, requires strict substantiation of
certain expenses, including those incurred with respect to any
listed property as defined in section 280F(d)(4). Listed
property includes any passenger automobile. See sec.
280F(d)(4)(A)(i). Section 274 supersedes the doctrine in Cohan
v. Commissioner, supra. See sec. 1.274-5T(a)(4), Temporary
Income Tax Regs., 50 Fed. Reg. 46014 (Nov. 6, 1985).
A taxpayer is required to substantiate expenses for listed
property by establishing the amount, time, place, and business
purpose of the expense. See sec. 274(d). Even if such an
expense would otherwise be deductible, the deduction may still be
denied if there is insufficient substantiation to support it.
See sec. 1.274-5T(a), Temporary Income Tax Regs., 50 Fed. Reg.
46014 (Nov. 6, 1985).
A taxpayer must maintain adequate records with respect to
listed property. See sec. 1.274-5T(c)(2)(i), Temporary Income
Tax Regs., 50 Fed. Reg. 46017 (Nov. 6, 1985). But where the
taxpayer establishes that the failure to produce adequate records
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