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With respect to the utility expenses, petitioner produced
telephone bills in the name of his mother (Helen Smiley) for
telephone service at Detroit Lakes from February through July
1995. There is no information as to who paid these expenses or
when they were paid. There is no documentation concerning the
other expenses claimed.
Respondent disallowed the expenses for lack of
substantiation and also contends that the claimed expenses were
not incurred in an activity entered into for profit.
Discussion
Section 162(a) allows deductions for ordinary and necessary
expenses paid or incurred in carrying on a trade or business.
Under section 274(d), however, a taxpayer may not deduct the use
of a passenger vehicle and lodging and meal expenses unless he or
she substantiates the amount of the expense, the time and place
of the travel, and the business purpose of the travel with
adequate records or sufficient evidence corroborating his or her
statement. See Miner v. Commissioner, T.C. Memo. 1999-358.
Generally, "to meet the 'adequate records' requirements of
section 274(d), a taxpayer shall maintain an account book, diary,
log, statement of expense, trip sheets, or similar record". Sec.
1.274-5T(c)(2)(i), Temporary Income Tax Regs., 50 Fed. Reg. 46017
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