- 26 -
14. Deductions to Which Section 274 Applies
a. Car and Truck Expenses
On their 1999 Schedule C for Dr. Rinker’s medical practice,
petitioners claimed deductions for car and truck expenses of
$6,077. Respondent disallowed the deduction.
Certain business deductions described in section 274 are
subject to strict rules of substantiation that supersede the
doctrine in Cohan v. Commissioner, supra at 544. See sec. 1.274-
5T(c)(2), Temporary Income Tax Regs., 50 Fed. Reg. 46017 (Nov. 6,
1985). Section 274(d)(4) disallows deductions with respect to
“listed property” unless the taxpayer satisfies the section 274
substantiation requirements. Under section 280F(d)(4)(A)(i),
“listed property” includes, among other items, passenger
automobiles. If a taxpayer cannot satisfy the substantiation
burden imposed by section 274(d) with respect to a deduction to
which it applies, he fails to carry his burden of establishing
that he is entitled to deduct that expense, regardless of any
equities involved. Sec. 274(d); Nicely v. Commissioner, T.C.
Memo. 2006-172; sec. 1.274-5T(a), Temporary Income Tax Regs., 50
Fed. Reg. 46014 (Nov. 6, 1985). Generally, taxpayers must
substantiate each required element of an expenditure or use.
Sec. 1.274-5T(b)(1), Temporary Income Tax Regs., 50 Fed. Reg.
46014 (Nov. 6, 1985). For deductions stemming from uses of
listed property, the elements that must be substantiated include
Page: Previous 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 NextLast modified: May 25, 2011