George H. Richards - Page 16

                                       - 15 -                                         
          automobile, the taxpayer must comply with strict substantiation             
          requirements under section 274(d)(4).  Section 274 requires, in             
          relevant part, that the taxpayer substantiate by either adequate            
          records or sufficient corroborating evidence the following items:           
          (1) The amount of the claimed expense; (2) the time and place of            
          the use of the property; and (3) the business purpose of the                
          expense.  Sec. 274(d); sec. 1.274-5T(b)(6), Temporary Income Tax            
          Regs., 50 Fed. Reg. 46016 (Nov. 6, 1985).  Even if such an                  
          expense is otherwise deductible, the deduction for the listed               
          item may be denied if the substantiation is insufficient to                 
          support it.  Id.  The substantiation requirements under section             
          274 override the general substantiation requirements of section             
          6001 and Cohan v. Commissioner, supra.                                      
               A self-employed individual may deduct a mileage allowance              
          under section 62(a)(1), section 1.274-5T(c)(2)(ii), Temporary               
          Income Tax Regs., 50 Fed. Reg. 46017 (Nov. 6, 1985), and section            
          1.274(d)-1, Income Tax Regs.  Dehr v. Commissioner, T.C. Memo.              
          1998-441.  A deduction for a mileage allowance requires the same            
          substantiation under section 274 as set forth above (i.e.,                  
          amount, time and place, and business purpose).  The amount of the           
          mileage can be substantiated by any reasonable means, such as               
          using a contemporaneous business log, or otherwise establishing             
          the miles driven.  Smith v. Commissioner, 80 T.C. 1165 (1983).              
          The Commissioner is authorized to establish the standard mileage            

Page:  Previous  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  Next

Last modified: May 25, 2011