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However, certain business deductions described in section
274 are subject to rules of substantiation that supersede the
Cohan doctrine. Section 274(d) provides that no deduction shall
be allowed with respect to: (a) Any traveling expense, including
meals and lodging away from home; (b) any item with respect to an
activity of a type generally considered to be entertainment,
amusement, or recreation; or (c) the use of any “listed
property”, as defined in section 280F(d)(4) unless the taxpayer
substantiates certain elements. Passenger automobiles are listed
property under section 280F(d)(4)(A)(i).
Under section 274, a taxpayer must substantiate the amount,
time, and business purpose of the expenditures and must provide
adequate records or sufficient evidence to corroborate his own
statement. See sec. 1.274-5T(c)(1), Temporary Income Tax Regs.,
50 Fed. Reg. 46016 (Nov. 6, 1985). Adequate records are defined
as an account book, diary, log, statement of expense, trip sheet,
or similar record. See sec. 1.274-5T(c)(2), Temporary Income Tax
Regs., 50 Fed. Reg. 46017 (Nov. 6, 1985).
When a taxpayer’s records have been destroyed or lost due to
circumstances beyond his control, such as destruction by fire,
flood, earthquake, or other casualty, the taxpayer has the right
to substantiate his deductions by reasonable reconstruction of
his expenditures. See sec. 1.274-5T(c)(5), Temporary Income Tax
Regs., 50 Fed. Reg. 46022 (Nov. 6, 1985). A taxpayer in this
situation may reconstruct his expenses through other credible
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Last modified: May 25, 2011