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estimate the amount of the deductible expense only when the
taxpayer provides evidence sufficient to establish a rational
basis upon which the estimate can be made. Vanicek v.
Commissioner, 85 T.C. 731, 743 (1985).
Section 274(d) supersedes the general rule of Cohan v.
Commissioner, supra, and prohibits the Court from estimating the
taxpayer’s expenses with respect to certain items. Sanford v.
Commissioner, 50 T.C. 823, 827 (1968), affd. per curiam 412 F.2d
201 (2d Cir. 1969). Section 274(d) imposes strict substantiation
requirements for listed property as defined in section
280F(d)(4), gifts, travel, entertainment, and meal expenses.
Sec. 1.274-5T(a), Temporary Income Tax Regs., 50 Fed. Reg. 46014
(Nov. 6, 1985). To obtain a deduction for a listed property,
travel, meal, or entertainment expense, a taxpayer must
substantiate by adequate records or sufficient evidence to
corroborate the taxpayer’s own testimony the amount of the
expense, the time and place of the use, the business purpose of
the use and, in the case of entertainment, the business
relationship to the taxpayer of each person entertained. Sec.
274(d); sec. 1.274-5T(b), Temporary Income Tax Regs., 50 Fed.
Reg. 46014 (Nov. 6, 1985). Section 274 requires that expenses be
recorded at or near the time when the expense is incurred. Sec.
1.274-5T(c)(1), Temporary Income Tax Regs., 50 Fed. Reg. 46016
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