Robert C. and Carol S. Jacobsen - Page 5

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          Expenses Subject to Section 274(d)                                          
               Respondent contends that petitioners did not adequately                
          substantiate the car and truck expenses deducted on their return,           
          citing section 274(d).  Because the disputed amount of $3,194 was           
          claimed for Mrs. Jacobsen and identified as vehicle expenses and            
          meals and entertainment expenses, the same considerations apply             
          to those items.  Sec. 274(d)(2), (4).  Section 274(d) provides in           
          part as follows:                                                            
                    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),                                            
                           (2) for any item with respect to an                        
                    activity which is of a type generally considered                  
                    to constitute entertainment, amusement, or                        
                    recreation, or with respect to a facility used in                 
                    connection with such an activity,                                 
                           (3) for any expense for gifts, or                          
                           (4) with respect to any listed property (as                
                    defined in section 280F(d)(4)),                                   
               unless the taxpayer substantiates by adequate records                  
               or by sufficient evidence corroborating the taxpayer’s                 
               own statement (A) the amount of such expense or other                  
               item, (B) the time and place of the travel,                            
               entertainment, amusement, recreation, or use of the                    
               facility or property, or the date and description of                   
               the gift, (C) the business purpose of the expense or                   
               other item, and (D) the business relationship to the                   
               taxpayer of persons entertained, using the facility or                 
               property, or receiving the gift.  The Secretary may by                 
               regulations provide that some or all of the                            
               requirements of the preceding sentence shall not apply                 

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