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Discussion
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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Last modified: May 25, 2011