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Certain Principles Applicable to the Issues Presented
A taxpayer is entitled to deduct all the ordinary and
necessary expenses paid or incurred during the taxable year in
carrying on a trade or business. Sec. 162(a).
For certain kinds of expenses otherwise deductible under
section 162(a), such as business expenses while traveling away
from home, business expenses with respect to an activity that is
of a type generally considered to constitute entertainment, and
business expenses relating to “listed property”, as defined in
section 280F(d)(4),7 a taxpayer must satisfy certain substantia-
tion requirements set forth in section 274(d) before such ex-
penses will be allowed as deductions.
In order for any of petitioner’s claimed expenses relating
to the use of his automobiles, for travel, for meals, and for
entertainment to be deductible, such expenses must satisfy the
requirements of not only section 162(a) but also section 274(d).
To the extent that petitioner carries his burden of showing that
such claimed expenses satisfy the requirements of section 162(a)
but fails to satisfy his burden of showing that such expenses
satisfy the recordkeeping requirements of section 274(d), peti-
tioner will have failed to carry his burden of establishing that
he is entitled to deduct such expenses, regardless of any equi-
7As pertinent here, the term “listed property” is defined in
sec. 280F(d)(4)(A)(i) to include any passenger automobile, unless
excepted by sec. 280F(d)(5)(B).
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Last modified: May 25, 2011