Case: Deductions Denied Due to Lack of Business Substantiation (T.C. Memo) (IRC §274)

Lack of substantiation by adequate records dooms deductions for travel, meals, bad loans, computer software and timeshare, the U.S. Tax Court held in a memorandum opinion. Taxpayer worked as a consultant and claimed several Schedule C deductions. Taxpayer also claimed business bad debts for loans to two businesses, a loss on the destruction of computer software, and his exiting a timeshare. Taxpayer gave the IRS travel logs but only after receiving notification of examination. The IRS denied all the deductions for lack of substantiation and Taxpayer’s inability to prove entitlement to deductions for bad debts and loss. Creating travel logs ...