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Generally, section l62(a) allows a deduction for all
ordinary and necessary expenses incurred in carrying on a trade
or business. Performance of services as an employee constitutes
a trade or business. O'Malley v. Commissioner, 9l T.C. 352, 363-
364 (l988).
The deduction of travel expenses away from home, including
meals and lodging, under section l62(a)(2), is conditioned on
such expenses' being substantiated by "adequate records" or by
other sufficient evidence corroborating the claimed expenses
pursuant to section 274(d). Sec. l.274-5T(a)(l), Temporary
Income Tax Regs., 50 Fed. Reg. 46014 (Nov. 6, 1985). To meet the
adequate records requirements of section 274(d), a taxpayer
"shall maintain an account book, diary, log, statement of
expense, trip sheets, or similar record * * * and documentary
evidence * * * which, in combination, are sufficient to establish
each element of an expenditure". Sec. l.274-5T(c)(2)(i),
Temporary Income Tax Regs., 50 Fed. Reg. 46017 (Nov. 6, 1985).
(Emphasis added.) The elements to be proven with respect to each
traveling expense are the amount, time, place, and business
purpose of the travel. Sec. l.274-5T(b)(2), Temporary Income Tax
Regs., 50 Fed. Reg. 46014 (Nov. 6, 1985). The substantiation
requirements of section 274(d) are designed to encourage
taxpayers to maintain records, together with documentary evidence
substantiating each element of the expense sought to be deducted.
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Last modified: May 25, 2011