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In the case of travel expenses, entertainment expenses, and
expenses paid or incurred with respect to listed property, e.g.,
passenger automobiles, section 274 overrides the Cohan doctrine,
and expenses are deductible only if the taxpayer meets the
section’s stringent substantiation requirements. Secs. 274(d),
280F(d)(4); Sanford v. Commissioner, 50 T.C. 823, 827-828 (1968),
affd. 412 F.2d 201 (2d Cir. 1969); sec. 1.274-5T(a), Temporary
Income Tax Regs., 50 Fed. Reg. 46014 (Nov. 6, 1985).
Section 274(d) specifically provides:
SEC. 274(d). Substantiation Required.--No deduction or
credit shall be allowed–-
(1) under section 162 or 212 for any traveling
expense (including meals and lodging while away
from home),
(2) for any item with respect to an activity which
is of a type generally considered to constitute
entertainment, amusement, or recreation, or with
respect to a facility used in connection with such
an activity,
(3) for any expense for gifts, or
(4) with respect to any listed property (as
defined in section 280F(d)(4)),
unless the taxpayer substantiates by adequate records or by
sufficient evidence corroborating the taxpayer’s own
statement (A) the amount of such expense or other item, (B)
the time and place of the travel, entertainment, amusement,
recreation, or use of the facility or property, or the date
and description of the gift, (C) the business purpose of the
expense or other item, and (D) the business relationship to
the taxpayer of persons entertained, using the facility or
property, or receiving the gift. * * *
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Last modified: May 25, 2011