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prove that he actually incurred the claimed expenses; respondent
asserts that petitioner’s testimony standing alone is
insufficient proof for this purpose. Respondent asserts thirdly
that petitioner may not use the subject revenue procedures to
ascertain the amounts of his deductions because, respondent
asserts, those revenue procedures do not apply when only
incidental expenses are incurred.
We agree with petitioner that he is entitled to the claimed
deductions but disagree with him as to the amounts of those
deductions. We hold that petitioner’s deductions are limited to
the incidental expense portions of the applicable M&IE rates. We
begin our analysis with the relevant statutory provisions. An
individual may deduct all ordinary and necessary expenses paid or
incurred during the taxable year in carrying on a trade or
business. See sec. 162(a). Services performed by an employee
constitute a trade or business for this purpose, see O'Malley v.
Commissioner, 91 T.C. 352, 363-364 (1988), and ordinary and
necessary expenses generally include amounts which an employee
pays while traveling away from home in connection with his or her
employment, see sec. 162(a)(2). Section 162 does not, however,
allow a taxpayer to deduct travel expenses attributable to
personal, living, or family expenses. See sec. 262. Nor does
section 162 allow a taxpayer to deduct travel expenses absent
either compliance with the substantiation requirements of section
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