Can I estimate travel expenses at audit?

No — §274 bars Cohan estimation for these categories. Reconstructed logs after the notice rarely persuade.

Are business meals fully deductible?

Generally 50%, with documentation of amount, time, place, and business purpose. Lavish spending fails the ordinary test first.

What records satisfy §274?

Contemporaneous logs plus receipts: who, what, where, when, and why — made at the time, corroborated by third parties.

IRC §274 · 26 U.S.C. §274

IRC §274: Disallowance and Substantiation

By Paul D. Diaz, EA, MBA · Updated September 20, 2026

IRC §274 disallows deductions for entertainment and strictly polices travel, meals, gifts, and listed property — no records, no deduction, no estimation allowed. It is the statute that killed Cohan-style guessing for these categories and the reason contemporaneous logs decide examinations.

What it governs

Entertainment disallowed outright since tax reform
Business meals generally 50%, with documented purpose
Travel needs time, place, and business purpose — logged, not remembered
Listed property (vehicles and the like) needs mileage-style records

In the GuideFull treatment in Chapter 18 of the Guide — THE TAX CUTTERY® Guide to Federal Income Taxation, Professional Edition (564 pages, 24 chapters).

From the practiceRecords that survive: audit triggers →

Questions this section answers

Can I estimate travel expenses at audit?: No — §274 bars Cohan estimation for these categories. Reconstructed logs after the notice rarely persuade.
Are business meals fully deductible?: Generally 50%, with documentation of amount, time, place, and business purpose. Lavish spending fails the ordinary test first.
What records satisfy §274?: Contemporaneous logs plus receipts: who, what, where, when, and why — made at the time, corroborated by third parties.

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