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place, and business purpose of the expenditure and must provide
adequate records or sufficient evidence to corroborate the
claimed expense. Sec. 274(d); sec. 1.274-5T(c)(1), Temporary
Income Tax Regs., supra. In order to meet the “adequate records”
requirement, a taxpayer must maintain an account book, diary,
statement of expenses, or similar record and documentary evidence
(such as receipts, paid bills, or similar evidence) which, when
combined, establish each element of the expense that section
274(d) requires to be established. Sec. 1.274-5T(c)(2)(i),
Temporary Income Tax Regs., supra. Petitioners’ credit card
statements and the spreadsheet that was created after the year at
issue do not meet the adequate records requirement for meals and
entertainment expenses of section 274(d) and the regulations
because they fail to sufficiently corroborate petitioners’ own
statements. Id. Since petitioners did not provide the required
substantiation for these expenses, they are not entitled to the
deduction for meals and entertainment expenses.
Other Expenses
Petitioners claimed a deduction of $3,585 for other
expenses, including books, postage, printing, Internet access at
Kinko’s, and other items. Aside from monthly credit card
statements and nonitemized credit card receipts, petitioners
offered no documentary evidence to support the claimed expenses.
Additionally, petitioners did not establish that these expenses
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