- 5 -
circumstances, where a taxpayer establishes entitlement to a
deduction but does not establish the amount of the deduction, the
Court is allowed to estimate the amount allowable. See Cohan v.
Commissioner, 39 F.2d 540 (2d Cir. 1930). However, section
274(d) overrules the so-called Cohan doctrine and provides that
no deduction is allowable under section 162 for any traveling
expenses, including meals and lodging while away from home,
unless the taxpayer complies with strict substantiation rules.
See sec. 274(d)(1), (4). Particularly, the taxpayer must
substantiate the amount, time, place, and business purpose of the
enumerated types of expenses by adequate records or by sufficient
evidence corroborating his own statement. See sec. 274(d); sec.
1.274-5T(b)(2), (6), (c), Temporary Income Tax Regs., 50 Fed.
Reg. 46016 (Nov. 6, 1985).
Section 274(d) and the regulations thereunder vest the
Secretary with the authority to promulgate regulations that
prescribe alternative methods for substantiating expenses covered
by section 274. See sec. 1.274-5T(j), Temporary Income Tax
Regs., 50 Fed. Reg. 46016 (Nov. 6, 1985). Pursuant to this
authority, the Secretary issued Rev. Proc. 93-50, 1993-2 C.B.
586, providing rules under which the amount of ordinary and
necessary business expenses of an employee for lodging, meals,
and/or incidental expenses incurred while traveling away from
home will be deemed substantiated for purposes of section 274(d).
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011