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The taxpayer may substantiate the amount of mileage by adequate
records or sufficient evidence that corroborates his statements.
See sec. 274(d). A record of the mileage made at or near the
time of the automobile’s use that is supported by documentary
evidence has a high degree of credibility not present with a
subsequently prepared statement. See sec. 1.274-5T(c)(1) through
(3), Temporary Income Tax Regs., 50 Fed. Reg. 46016 (Nov. 6,
1985). If the amount is not substantiated by adequate records or
sufficient corroborative evidence, then it is disallowed. Sec.
274(d).
Petitioners did not submit any evidence to substantiate the
amounts of the expenditures or business mileage. At trial, Mrs.
Sizelove testified that respondent “brought to my attention that
we deducted the depreciation [twice, which Mr. Sizelove
guesstimated, and] the only thing I can say is * * * we did
everything honest and above-board”.
Because the Court has determined that Mr. Sizelove was not
an employee of the club, it follows that petitioners are not
entitled to a deduction for the portion of the vehicle expenses
attributable to the club. As to the portion of the vehicle
expenses related to Mr. Sizelove’s employment at the liquor
store, petitioners did not provide any evidence that satisfies
the strict substantiation requirements of section 274(d), and
therefore, they are not entitled to deduct it. Accordingly,
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Last modified: March 27, 2008