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petitioner’s business”, Welch v. Helvering, supra at 113. A
“trade or business” includes the trade or business of being an
employee. O’Malley v. Commissioner, 91 T.C. 352, 363-364 (1988);
Primuth v. Commissioner, 54 T.C. 374, 377-378 (1970). Pursuant
to section 162, a taxpayer must maintain records sufficient to
substantiate the amounts of the deductions claimed. Sec. 6001;
Meneguzzo v. Commissioner, 43 T.C. 824, 831-832 (1965); sec.
1.6001-1(a), (e), Income Tax Regs.
In addition to satisfying the criteria for deductibility
under section 162, the taxpayer must also satisfy the strict
substantiation requirements of section 274(d) for certain
categories of expenses in order for a deduction to be allowed.
Section 274(d) disallows deductions for traveling expenses and
meals and entertainment unless the taxpayer substantiates by
adequate records or by sufficient evidence corroborating the
taxpayer’s own statement: (1) The amount of the expense; (2) the
time and place of the expense; (3) the business purpose of the
expense; and (4) the business relationship to the taxpayer of the
persons involved in the expense.
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. Sec. 1.274-5T(c)(1), Temporary
Income Tax Regs., 50 Fed. Reg. 46016 (Nov. 6, 1985).
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