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taxable year in carrying on any trade or business. Such expenses
must be directly connected with or pertain to the taxpayer's
trade or business. Sec. 1.162-1(a), Income Tax Regs. The
determination of whether an expenditure satisfies the
requirements of section 162 is a question of fact. Commissioner
v. Heininger, 320 U.S. 467, 475 (1943).
Section 162(a)(2) allows a deduction for all the ordinary
and necessary traveling expenses, including meals, paid by a
taxpayer during the taxable year while traveling away from home
in the pursuit of a trade or business. A travel or entertainment
deduction is disallowed if the taxpayer does not satisfy the
substantiation requirements of section 274(d)5 through either
5Sec. 274(d) provides:
(d)Substantiation Required.--No deduction or
credit shall be allowed--
(1) under section 162 or 212 for any
traveling expense (including meals and lodging
while away from home),
(2) for any item with respect to an activity
which is of a type generally considered to
constitute entertainment, amusement, or
recreation, or with respect to a facility used in
connection with such an activity,
(3) for any expense for gifts, or
(4) with respect to any listed property (as
defined in section 280F(d)(4)),
unless the taxpayer substantiates by adequate records
(continued...)
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Last modified: May 25, 2011