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citation; however, the record is devoid of any proof that he
actually incurred this expense. Accordingly, we find petitioner
is entitled to deduct a Schedule C expense for legal and
professional fees only to the extent of $105.
On their 2002 Schedule C, petitioners deducted travel
expenses of $3,202. With respect to travel expenses and certain
other expenses, including property used as a means of
transportation, section 274(d) imposes stringent substantiation
requirements to document with particularity 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 expenses is required. Sec. 274(d);
sec. 1.274-5T(a)(1), 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
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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