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Sec. 274(d). Listed property includes any passenger automobile
or any other property used as a means of transportation. Sec.
280F(d)(4)(A)(i) and (ii).
A taxpayer is required by section 274(d) to substantiate a
claimed expense by adequate records or by sufficient evidence
corroborating the taxpayer’s own statement establishing the
amount, time, place, and business purpose of the expense. Sec.
274(d). Even if such an expense would otherwise be deductible,
the deduction may still be denied if there is insufficient
substantiation to support it. Sec. 1.274-5T(a), Temporary Income
Tax Regs., supra.
1. Car and Truck
At trial, petitioner’s testimony as to the car and truck
expense was confusing and inconsistent. As stated above, section
274 requires strict substantiation for deductions claimed for
transportation in a passenger car. Petitioner testified that he
used the actual mileage to calculate the $4,900 car and truck
expense. Steven Sheeley, the Internal Revenue Service agent who
handled petitioner’s audit, testified that petitioner explained
at audit that he calculated the amount of this deduction on a per
mile allocation; i.e., 20,000 business miles at 31 cents per
mile. Despite the apparent conflict in testimony, the rule for
substantiating car and truck expenses is clear. Petitioner is
required to provide a mileage log establishing the amount, time,
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Last modified: May 25, 2011