Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2025 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
Under the federal tax law, a trade or business expense must be substantiated to be deductible under I.R.C. section 162. “Substantiation” of a business deduction requires proof of the amount of the payment and evidence establishing the character of the expense. An unsubstantiated business deduction may result in interest and penalties, in addition to denial of the deduction. Stricter substantiation requirements apply to travel expenses, entertainment expenses, and business gifts than for most other expenses.
Publication Date: November 2022
Designed For
None
Topics Covered
- Rules allowing deduction of business expenses, and intersection with
capitalization rules
- Definition of "substantiation"
- Examples of acceptable proof of payment
- When and how the taxpayer is required to document the character of the expense
- Special requirements that may apply to employee business expenses
- Common circumstances in which taxpayers may have more difficulty substantiating expenses
Learning Objectives
- Recognize how to describe substantiation
- Identify examples of acceptable proof of payment
- Recognize when and how the taxpayer is required to document the character of the expense
- Identify special requirements that may apply to employee business expenses
- Recognize how to discuss common circumstances in which taxpayers may have more difficulty substantiating expenses
- Identify the IRC Section that a trade or business expense must be substantiated to be deductible under, under Federal tax law
- Identify the method that business expenses are deducted when all events have occurred that fix the fact of liability, and the amount of the liability can be determined with reasonable accuracy
- Identify the percentage a taxpayer may deduct of an otherwise allowable meal expense if it meets certain requirements under Regs. Sec. 1.274-12(a)(1)
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
None
Advance Preparation
None
Instructor
Jennifer Kowal
Jennifer Kowal, JD, has been a tax professor and the director of the graduate tax program at Loyola Law School in Los Angeles since 2003. Loyola’s graduate tax program offers an LL.M. in Taxation for attorneys and a Master in Tax Law for non-lawyers. Professor Kowal teaches courses in advanced income taxation, income tax timing issues, corporate taxation, and tax research, among others. Prior to teaching at Loyola, Professor Kowal taught in the International Tax Program at Harvard Law School.
She also practiced law with the firms of Irell & Manella in Los Angeles and Ropes & Gray in Boston, advising clients on the taxation of various business transactions, including cross-border, partnership and corporate structures. Professor Kowal holds a BS in Accounting with distinction from the University of Kansas, and a JD from UCLA School of Law, where she was a member of the Order of the Coif.