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2. Sections 162(a)(2) and 274(d)(1)
In pertinent part, section 162(a)(2) provides:
There shall be allowed as a deduction [in computing
taxable income] all the ordinary and necessary expenses
paid or incurred during the taxable year in carrying on
any trade or business, including--
* * * * * * *
(2) traveling expenses (including amounts expended
for meals and lodging other than amounts which are
lavish or extravagant under the circumstances)
while away from home in the pursuit of a trade or
business * * *
Section 274(d)(1) provides that no deduction shall be
allowed pursuant to the provisions of section 162 for traveling
expenses, including meals and lodging, unless the taxpayer
substantiates “by adequate records or by sufficient
evidence corroborating the taxpayer’s own statement” the specific
time, place, and amount of the claimed expenditures, as well as
the business purpose of the expense. Section 274(d)(1) is
applicable to corporate as well as individual taxpayers. See
Group Admin. Premium Serv., Inc. v. Commissioner, T.C. Memo.
1996-451; Rosenthal Chiropractic Offices, Inc. v. Commissioner,
T.C. Memo. 1993-331.
3. Arguments of the Parties
Petitioner argues: “In FY 94 [the 1994 tax year], the
apartment was used for business for approximately 177 days.”
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