- 5 -
automobiles or other property used as a means of transportation.
Sec. 274(d)(4). To meet the strict substantiation requirements,
the taxpayer must substantiate the amount, time, place, and
business purpose of the expenses. Sec. 274(d); sec. 1.274-5T,
Temporary Income Tax Regs., 50 Fed. Reg. 46014 (Nov. 6, 1985).
With respect to the use of automobiles, in order to establish the
amount of an expense the taxpayer must establish the amount of
business mileage and the amount of total mileage for which the
automobile was used. Sec. 1.274-5T(b)(6)(i)(B), Temporary Income
Tax Regs., 50 Fed. Reg. 46016 (Nov. 6, 1985). The taxpayer may
substantiate the amount of mileage by adequate records or by
sufficient evidence corroborating his own statement. Sec.
274(d). A record of the mileage made at or near the time the
automobile was used, supported by documentary evidence, has a
high degree of credibility not present with a subsequently
prepared statement. Sec. 1.274-5T(c)(1), (2), and (3), Temporary
Income Tax Regs., 50 Fed. Reg. 46016 (Nov. 6, 1985).
Petitioners’ exact relationship to the Olray corporation is
unclear: Although petitioner testified that he is the president
of the corporation, nothing indicates an employment role for
petitioner wife, nor was the ownership of the corporation
explained. The expenses at issue seem intricately tied to the
corporation; thus, it is unclear why petitioners claimed the
expenses as deductions on their individual income tax return
Page: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011