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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).
Ms. Rhodes’s records with respect to her car and truck
expenses for Keepsake do not satisfy the requirements of section
274(d) and the regulations cited. Ms. Rhodes testified she often
drove to numerous stores searching for the best prices for
supplies, and, in addition, she drove to a variety of locations
to meet with clients and then later drove to wedding or funeral
locations to deliver flowers and other decorative arrangements.
She kept track of her mileage by writing locations and/or miles
driven on a daily calendar. The total miles recorded on her
calendars for both years, however, do not match the mileage she
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