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sec. 1.6001-1(a), Income Tax Regs.
Generally, except as otherwise provided by section 274(d),
when evidence shows that a taxpayer incurred a deductible
expense, but the exact amount cannot be determined, the Court may
approximate the amount bearing heavily if it chooses against the
taxpayer whose inexactitude is of his own making. Cohan v.
Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930). The Court,
however, must have some basis upon which an estimate can be made.
Vanicek v. Commissioner, 85 T.C. 731, 742-743 (1985).
Section 274(d) imposes stringent substantiation requirements
for the deduction of travel and entertainment expenses.
Taxpayers must substantiate by adequate records the following
items in order to claim these deductions: The amount of such
expense, the time and place of the travel or entertainment, the
business purpose of the expense, and the business relationship to
the taxpayer of persons entertained. Sec. 274(d); sec. 1.274-
5T(b)(2) and (3), Temporary Income Tax Regs., 50 Fed. Reg. 46014-
46015 (Nov. 6, 1985). To substantiate a travel or meals and
entertainment deduction by means of adequate records, a taxpayer
must maintain an account book, diary, log, statement of expense,
trip sheet, and/or other documentary evidence which, in
combination, are sufficient to establish each element of
expenditure or use. Sec. 1.274-5T(c)(2)(i), Temporary Income Tax
Regs., 50 Fed. Reg. 46017 (Nov. 6, 1985). Travel and meals and
entertainment expenses cannot be estimated under Cohan. Shea v.
Commissioner, 112 T.C. 183, 188 (1999); sec. 1.274-5T(a),
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Last modified: May 25, 2011