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Furthermore, business expenses described in section 274 are
subject to rules of substantiation that supersede the doctrine of
Cohan v. Commissioner, supra. Sanford v. Commissioner, 50 T.C.
823, 827-828 (1968), affd. 412 F.2d 201 (2d Cir. 1969); sec.
1.274-5T(a), Temporary Income Tax Regs., 50 Fed. Reg. 46014 (Nov.
6, 1985). Section 274(d) provides that no deduction shall be
allowed for, among other things, traveling expenses,
entertainment expenses, gifts, and expenses with respect to
listed property (as defined in section 280F(d)(4) and including
passenger automobiles, computer equipment, and cellular
telephones) “unless the taxpayer substantiates by adequate
records or by sufficient evidence corroborating the taxpayer’s
own statement”: (1) The amount of the expenditure or use; (2)
the time and place of the expenditure or use, or date and
description of the gift; (3) the business purpose of the
expenditure or use; and (4) in the case of entertainment or
gifts, the business relationship to the taxpayer of the
recipients or persons entertained. Sec. 274(d).
On this issue, petitioners neither at trial nor on brief
offered argument directed towards the deductibility of any of the
specific expenses disallowed or recharacterized by respondent.
Rather, their contentions seem to be confined to the following
generalized paragraph on reply brief:
Similarly, Respondent repeatedly contends in his Brief
(e.g., at 10, 11) that Petitioners failed to
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