- 17 - or the unsupported testimony of the taxpayer. E.g., Golden v. Commissioner, T.C. Memo. 1993-602. In other words, in the absence of adequate records or sufficient evidence corroborating the taxpayer’s own statement, any deduction that is subject to the stringent substantiation requirements of section 274(d) is proscribed. These stringent substantiation requirements are designed to encourage taxpayers to maintain records, together with documentary evidence substantiating each element of the expense to be deducted. Sec. 1.274-5T(c)(1), Temporary Income Tax Regs., 50 Fed. Reg. 46017 (Nov. 6, 1985). In addition to the strict substantiation requirements of section 274(d), a deduction for foreign travel is subject to the allocation requirements of section 274(c). E.g., Shackelford v. Commissioner, T.C. Memo. 1995-484; Hilton v. Commissioner, T.C. Memo. 1990-11. Thus, section 274(c) generally requires the proration of foreign travel expenses between business and nonbusiness expenses. With the foregoing general principles in mind, we turn now to the specific Schedule C deductions in issue. 2. Depreciation, Office Furnishings, EDI Fee, etc. On his Schedule C for 1999, petitioner claimed a deduction for “EDI fee, advertising, telephone, etc.” in the amount of $9,113; of this amount, respondent allowed $1,489 and disallowed the balance. On his Schedule C for 2000, petitioner claimed a deduction for used file cabinets, chairs, and tables in thePage: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Next
Last modified: May 25, 2011