Karan M. Hintze - Page 14

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          not an employee of petitioner.  Accordingly, no deduction                   
          attributable to expenses incurred on his behalf is allowed.  See            
          sec. 274(m)(3)(A); sec. 1.274-2(g), Income Tax Regs.                        
               While petitioner has satisfied the substantiation                      
          requirements of section 274(d) with respect to a number of her              
          foreign traveling expenses, section 274(c) must also be addressed           
          given that these expenses relate to travel outside the United               
          States.  Section 274(c)(1) provides that no deduction (otherwise            
          allowable under section 162) shall be allowed for that portion of           
          the expenses attributable to travel outside the United States               
          which, under regulations prescribed by the Secretary, is not                
          allocable to the taxpayer’s trade or business.  See also sec.               
          1.274-4(a), Income Tax Regs.  The provisions of section 274(c)(1)           
          are applicable only if (a) the travel outside the United States             
          exceeds 1 week and (b) the portion of the time of such travel               
          which is not attributable to the pursuit of the taxpayer’s trade            
          or business is 25 percent or more of the total time of such                 
          travel.  See sec. 274(c)(2); sec. 1.274-4(b), Income Tax Regs.              
               The record reflects that petitioner’s travel to Denmark in             
          May of 1994 spanned a 6-day period from May 18 to May 23.  We               
          therefore find that petitioner’s travel overseas during this                
          period did not exceed 1 week.  As the exception under section               
          274(c)(2)(A) applies, section 274(c)(1) does not impose an                  
          additional restriction on petitioner’s ability to deduct                    

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