- 21 -
Moreover, the documents that petitioners have introduced
into evidence do not adequately substantiate the claimed
expenses. The copies of checks introduced by petitioners
generally do not indicate cancellation by the bank and are
unaccompanied by invoices to substantiate the purpose of the
expenditures. For instance, one check totaling $15,681.23
purports to be for office furniture, but there is no accompanying
invoice or other evidence showing a purchase of office furniture,
or for that matter, evidence to indicate that Transnet even had
an office.
In general, section 274(d) disallows any deduction for
certain types of expenses, including travel, entertainment, and
automotive expenses, unless the taxpayer substantiates by
adequate records or sufficient evidence corroborating the
taxpayer's own testimony, the amount, time, place, business
purpose, and business relationship.
During the year at issue, petitioners deducted $1,929 as
meals and entertainment expenses, and $1,651 for travel expenses.
Petitioners have not substantiated these expenses in accordance
with the requirements of section 274, and accordingly they must
be disallowed. Cf. Sam Goldberger, Inc. v. Commissioner, 88 T.C.
1532, 1558 (1987); Mohan Roy, M.D., Inc. v. Commissioner, T.C.
13(...continued)
been altered to remove the preprinted legend bearing the account
holder’s name and address. Other portions of the exhibit consist
simply of Hartman’s bank deposit slips and bear no original
reference to petitioners or Transnet.
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: May 25, 2011