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not made at or near the time of the expenditure or use
must have a high degree of probative value to elevate
such statement and evidence to the level of credibility
reflected by a record made at or near the time of the
expenditure or use supported by sufficient documentary
evidence. The substantiation requirements of section
274(d) are designed to encourage taxpayers to maintain
the records, together with documentary evidence, as
provided in paragraph (c)(2) of this section [1.274-5T,
Temporary Income Tax Regs.].
Sec. 1.274-5T(c)(1), Temporary Income Tax Regs., 50 Fed. Reg.
46016-46017 (Nov. 6, 1985).
Respondent concedes that petitioners have substantiated the
following travel expenses for fuel, food, and lodging:
Item 2001 2002 2003
Fuel $303.75 $168.22 $264.84
Food 87.39 82.73 120.17
Motel -0- 689.05 -0-
Total travel 391.14 940.00 385.01
2. Alternative Substantiation Methods
Petitioners assert that they are entitled to use the per
diem rates to substantiate their travel expenses. Section 274(d)
permits the Secretary to provide by regulations that some or all
of the substantiation requirements do not apply in the case of an
expense that does not exceed an amount prescribed by the
regulations. Pursuant to section 1.274-5(g), Income Tax Regs.,
the Commissioner is authorized to prescribe rules in
pronouncements of general applicability under which allowances
for certain types of ordinary and necessary expenses for
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