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are paid or incurred during the taxable year in carrying on a
trade or business. Sec. 162(a); Deputy v. du Pont, 308 U.S. 488,
495 (1940). A trade or business includes the trade or business
of being an employee. O’Malley v. Commissioner, 91 T.C. 352,
363-364 (1988).
In the case of travel expenses and certain other expenses,
such as entertainment, gifts, and expenses relating to the use of
listed properties, including cellular telephone or other similar
telecommunications equipment described in section 280F(d)(4)(A),
section 274(d) imposes stringent substantiation requirements to
document particularly the nature and amount of such expenses.
For such expenses, substantiation of the amounts claimed by
adequate records or by other sufficient evidence corroborating
the claimed expenses is required. Sec. 274(d); sec. 1.274-
5T(a)(4), 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. 1.274-
5T(c)(2)(i), Temporary Income Tax Regs., 50 Fed. Reg. 46017 (Nov.
6, 1985). These substantiation requirements are designed to
encourage taxpayers to maintain records, together with
documentary evidence substantiating each element of the expense
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Last modified: May 25, 2011