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Further, the first two sentences of section 1.274-5(e),
Income Tax Regs., as applicable to 1985, 1986, and 1987, and
section 1.274-5T(f)(1), Temporary Income Tax Regs., 50 Fed. Reg.
46027 (Nov. 6, 1985), confirm that even if travel expenses are
paid in connection with the “performance of services” and are
otherwise deductible under section 162 (which is what the
majority opinion holds), they must still satisfy the
substantiation requirements of section 274(d).
A closer look at the relevant statutory language is helpful.
There are important differences in the language and operation of
section 162(a)(2) (an allowance provision that relates only to
overnight travel expenses) and of section 274(d)(1)
(a disallowance provision that relates to any and all travel
expenses).
Section 162(a)(2) provides that deductions for all taxpayers
are allowed for any:
(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. [Emphasis added.]
Section 274(d)(1), however, in pertinent part provides:
SEC. 274(d). Substantiation required.–- No deduction
or credit shall be allowed–-
(1) under section 162 or 212 for any traveling
expense (including meals and lodging while away from
home),
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