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so, here, the check ledger does not support the Nortons’ claim for
an additional $4,650 for cost of goods sold. The amount recorded
on the check ledger ($4,450) differs from the invoice amount
($4,650). We are not convinced that Northridge’s cost of goods
sold for 1993 is greater than the amount stipulated. Consequently,
we conclude that Northridge’s cost of goods sold for 1993 is
$945,143.
C. Travel Expenses
No deduction for travel expenses was claimed on the original
Schedule C for Northridge’s activities. An amended Schedule C,
however, reflects a deduction in the amount of $5,822 for travel
expenses. During the audit, the Nortons submitted the following
receipts to substantiate their claimed travel expenses:
Overnight stay at Merit Inn $88.00
Check No. 13616 paid to VISA 1,731.09
Receipt Fantasia Travel 3,800.00
Check No. 13884 paid to VISA 532.00
Respondent allowed only $88 of the claimed $5,822. The
Nortons failed to introduce at trial any evidence to support their
claimed business travel expenses.
Section 274(d) requires strict substantiation for travel
expenses. Here, the Nortons failed to provide documentation or
other corroborating evidence to support their claimed travel
expenses. Consequently, we conclude that the Nortons are not
entitled to a deduction for travel expenses in an amount greater
than allowed by respondent.
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Last modified: May 25, 2011