Daniel R. Blodgett - Page 5




                                        - 5 -                                         
          entertainment expenses as required by section 274(d).  Petitioner           
          contends that documents substantiating the rest of his expenses             
          are in the possession of Mr. Kolter, who will not return them.              
          Petitioner further contends that he testified against Mr. Kolter            
          and that Mr. Kolter has been incarcerated for fraud.                        
               Section 162(a) allows as a deduction all the ordinary and              
          necessary expenses paid or incurred during the taxable year in              
          carrying on any trade or business.  Section 274(d), relating to             
          travel, meal, entertainment, and gift expenses, requires a                  
          taxpayer to substantiate                                                    
               by adequate records or by sufficient evidence                          
               corroborating the taxpayer’s own statement[,] (A) the                  
               amount of such expense or other item, (B) the time and                 
               place of the travel, entertainment, amusement,                         
               recreation, or use of the facility or property, or the                 
               date and description of the gift, (C) the business                     
               purpose of the expense or other item, and (D) the                      
               business relationship to the taxpayer of persons                       
               entertained, using the facility or property, or                        
               receiving the gift.  * * *                                             
          Section 1.274-5(c)(5), Income Tax Regs., states:                            
               Where the taxpayer establishes that the failure to                     
               produce adequate records is due to the loss of such                    
               records through circumstances beyond the taxpayer’s                    
               control, such as destruction by fire, flood,                           
               earthquake, or other casualty, the taxpayer shall have                 
               the right to substantiate a deduction by reasonable                    
               reconstruction of his expenditures.                                    
          Mr. Kolter’s representation of petitioner related to Quantum                
          (i.e., 1992) but not Equator (i.e., 1993 and 1994).  Petitioner’s           
          failure to produce adequate records relating to 1992 is due to              







Page:  Previous  1  2  3  4  5  6  7  8  Next

Last modified: May 25, 2011