- 24 -
II. Whether Petitioners Have Substantiated the Drivers’
Travel Expenses Pursuant to Section 274(d)
In any event, even if we were to agree with petitioners that
the complained-of conditions imposed by the revenue procedures
are invalid (which we do not), we would not reach a different
result in this case. In Beech Trucking Co., we noted that
“petitioner has not independently substantiated, and thus is
entitled to no deduction for, any of the subject expenses in
excess of those deemed to be substantiated under the revenue
procedures.” Beech Trucking Co. v. Commissioner, supra at 437.
We further stated: “Petitioner has not attempted * * * to
substantiate the drivers’ travel expenses in any manner that
would provide an evidentiary basis for allocating the per diem
payments between meal expenses and other reimbursed travel
expenses.” Id. at 451-452. In this case, petitioners’ second
bite at the apple, petitioners presented the testimony of some of
Continental’s drivers as to their estimated travel expenses.
Deductions are a matter of legislative grace, and
petitioners bear the burden of proving that they are entitled to
the deductions claimed. Rule 142(a); New Colonial Ice Co. v.
Helvering, 292 U.S. 435, 440 (1934).11
11 The examination in this case began Sept. 24, 1997;
therefore, sec. 7491 is inapplicable. Higbee v. Commissioner,
116 T.C. 438, 440 (2001) (sec. 7491 applies to examinations
(continued...)
Page: Previous 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 NextLast modified: May 25, 2011