§274(d) Substantiation

IRC §274(d) is the section of the tax code that requires strict substantiation of vehicle, travel, and certain other expenses — meaning the ordinary “Cohan rule” estimation doctrine that lets courts approximate other deductions does not apply here.

The four elements. Under §274(d) and Temp. Treas. Reg. §1.274-5T(c), for every business use of a vehicle you must substantiate, by adequate records or sufficient corroborating evidence:

1. Amount — the number of miles driven (or the dollar amount of the expense, under actual expense method).
2. Time — the date of each business use.
3. Place — the destination or route.
4. Business purpose — why this drive was a business trip.

Records must be “prepared or maintained in such manner that each recording of an element of an expenditure or use is made at or near the time of the expenditure or use” (Temp. Reg. §1.274-5T(c)(2)). A weekly log qualifies as “near the time”; a reconstruction from memory does not.

The Tax Court canon. The cases the IRS and the courts cite over and over:

• Velez v. Commissioner, T.C. Memo. 2018-46 — Ohio attorney lost an $18,946 mileage deduction because his “log” was reconstructed two days before trial from his iPad calendar. Plus a 20% accuracy-related penalty.
• Garza v. Commissioner, T.C. Memo. 2014-121 — 40,000 claimed business miles, only a calendar to back it up. Entire $20,085 deduction denied.
• Khan & Tahir v. Commissioner, T.C. Summ. Op. 2025-5 — Most recent restatement: “petitioners did not maintain adequate books or records that support the claimed expenses under section 274(d).” Cohan does not save you.
• Patitz v. Commissioner, T.C. Memo. 2022-99 — Couple argued Hurricane Matthew destroyed their substantiation; Tax Court (and the Eleventh Circuit on appeal in 2025) disallowed the mileage deduction anyway. Acts of God do not lower the §274(d) bar.
• Chappell v. Commissioner, T.C. Summ. Op. 2024-2 — The positive case. A real-estate agent who used the MileIQ app received the standard mileage rate applied to her properly-logged miles, even though other categories of records failed.

No Cohan, no exceptions. Section 274(d)(4) lists “any passenger automobile” as listed property under §280F(d)(4), which is what triggers the strict standard. Even if the court believes you drove for business, no log means no deduction. The famous quote from Garza: the court “must heed the strict substantiation requirements of section 274(d).”

Worked scenario. Jamie, a Lyft driver, claimed 28,000 business miles for 2024 but kept no contemporaneous log. Under audit she rebuilt the log from Lyft trip emails. The IRS allowed only the passenger-in-car miles Lyft itself reported (about 17,000 miles) and disallowed the “pursuit” miles between rides. Result: a $7,500 deduction loss plus penalty.