This revenue procedure provides the procedures under which the whaling
expenses of an individual recognized by the Alaska Eskimo Whaling Commission
(AEWC) as a whaling captain charged with the responsibility of maintaining
and carrying out sanctioned whaling activities are substantiated for purposes
of Internal Revenue Code § 170(n), as enacted by the American Jobs
Creation Act of 2004 and effective for whaling expenses incurred after December
31, 2004. Pub. L. No. 109-357, § 335.
.01 The AEWC was formed in 1977 to represent the Alaskan whaling communities
in efforts to preserve the Eskimo subsistence hunting of bowhead whales (Baleana
mysticetus). The AEWC’s purpose is to protect the bowhead
whale and its habitat; preserve Eskimo subsistence bowhead whaling and associated
Eskimo culture, traditions, and activities; and conduct research and education
activities related to bowhead whales.
.02 The AEWC recognizes certain individuals as whaling captains and
provides rules for the conduct of sanctioned whaling activities. It requires
these captains to file reports detailing their whaling activities.
.03 Section 170(n) provides that an individual recognized by the AEWC
as a whaling captain, who is responsible for maintaining and carrying out
sanctioned whaling activities and engages in these activities during the taxable
year, may claim a charitable contribution deduction not exceeding $10,000
per taxable year for the reasonable and necessary whaling expenses paid in
carrying out sanctioned whaling activities. Section 170(n) is effective for
contributions made after December 31, 2004.
.04 Under § 170(n)(2)(B), “whaling expenses” include
amounts paid for (1) the acquisition and maintenance of whaling boats, weapons,
and gear used in sanctioned whaling activities, (2) the supplying of food
for the crew and other provisions for carrying out sanctioned whaling activities,
and (3) the storage and distribution of the catch from sanctioned whaling
.05 Section 170(n)(3) defines “sanctioned whaling activities”
as subsistence bowhead whale hunting activities conducted pursuant to the
management plan of the AEWC.
.06 Section 170(n)(4) directs the Secretary to issue guidance requiring
taxpayers claiming a deduction under § 170(n) to substantiate their
whaling expenses by maintaining appropriate written records of the time, place,
date, amount, and nature of the expenses and of the taxpayer’s eligibility
for the deduction.
.07 A whaling captain may deduct an amount for whaling expenses only
as an itemized deduction. See § 63(d).
This revenue procedure applies to taxpayers who are recognized by the
AEWC as whaling captains and who pay whaling expenses during the taxable year
in carrying out sanctioned whaling activities as captain of a whaling crew.
SECTION 4. SUBSTANTIATION OF EXPENSES
.01 In general. A taxpayer within the scope of
this revenue procedure is required to substantiate a deduction for whaling
expenses by maintaining adequate records of the elements of time, place, date,
amount, and nature of the expenses as required under section 4.02, and of
the taxpayer’s eligibility for the deduction as required under section
4.03, of this revenue procedure.
.02 Requirements for adequate records of whaling expenses.
A taxpayer within the scope of this revenue procedure must meet each of the
following adequate records requirements:
(1) A taxpayer satisfies the adequate records requirement of this revenue
procedure by maintaining written records that include—
(A) An expense report (such as an account book, diary, log, statement
of expense, trip sheets, or similar record that lists each expense); and
(B) Documentary evidence (such as a receipt, bill, invoice, or credit
card record of charge) for each expense of $75 or more.
(2) Adequate records must document each applicable element of a whaling
expense, including the following information:
(A) Time and date of departure and return for each trip for sanctioned
(B) Place or area of sanctioned whaling activities;
(C) Amount of each separate expense, such as the cost of weapons; and
(D) The nature of each expense including a description of the purpose
of the expense and the relationship of the expense to sanctioned whaling activities.
(3) The expense report, in combination with the documentary evidence,
must be sufficient to establish each element of a whaling expense. It is
not necessary to record information in an expense report that duplicates information
reflected on documentary evidence (such as a receipt) as long as the expense
report and the documentary evidence substantiate each expense in an orderly
(4) Adequate records must be made at or near the time of the expenditure
or activity. Records are made at or near the time of the expenditure or activity
if information relating to each element (time, place, date, amount, and nature
of the expense) is recorded at a time when the taxpayer has full present knowledge
of the information.
.03 Substantiation of eligibility for the deduction.
A taxpayer must substantiate eligibility to deduct whaling expenses under
§ 170(n) by maintaining documentation that the taxpayer is recognized
as a whaling captain by the AEWC and copies of all reports the taxpayer submits
to the AEWC.
.04 Substantiation under revenue procedure required.
An expense that is not substantiated in accordance with this revenue procedure
may not be deducted as a whaling expense under § 170(n). Except
as provided in section 5.02 of this revenue procedure, a taxpayer’s
uncorroborated statement or estimates of expenses unsupported by adequate
records do not constitute substantiation for purposes of § 170(n).
SECTION 5. MAINTENANCE OF RECORDS
.01 A taxpayer must maintain with the taxpayer’s books and records,
and be able to produce upon request of the Internal Revenue Service, the documentation
described in section 4 of this revenue procedure. A taxpayer is not required
to attach the documentation to the taxpayer’s tax return.
.02 Notwithstanding section 4.04 of this revenue procedure, a taxpayer
who establishes that a failure to produce adequate records is due to the loss
of the records through circumstances beyond the taxpayer’s control,
such as destruction by fire, flood, earthquake, or other casualty, may substantiate
a deduction under § 170(n) by a reasonable reconstruction of the
.01 A taxpayer may not deduct expenses under both § 170(n)
and another provision of the Code.
.02 Expenses relating to a whaling boat that is used for sanctioned
whaling activities and other activities in a taxable year must be allocated
between the sanctioned whaling activities and other activities by comparing
the total number of days the whaling boat is used for sanctioned whaling activities
to the total number of days in the taxable year.
SECTION 7. EFFECTIVE DATE
This revenue procedure is effective for whaling expenses paid after
November 20, 2006.
SECTION 8. PAPERWORK REDUCTION ACT
The collection of information contained in this revenue procedure has
been reviewed and approved by the Office of Management and Budget in accordance
with the Paperwork Reduction Act (44 U.S.C. 3507) under control number 1545-2041.
An agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless the collection of information
displays a valid OMB control number.
The collection of information in this revenue procedure is in sections
4 and 5. This information is required to substantiate the amount of expenses
paid in support of native Alaskan subsistence whaling and eligibility to deduct
the expenses. This information will be used to substantiate expenses paid
during the taxable year in carrying out sanctioned whaling activities upon
audit. The collection of information is required to obtain a benefit. The
likely respondents are individuals recognized as whaling captains by the AEWC.
The estimated total annual recordkeeping burden is 48 hours.
The estimated annual burden per record keeper varies from one to three
hours, depending on individual circumstances, with an estimated average of
two hours. The estimated number of record keepers is 12 to 24.
Books or records relating to a collection of information must be retained
as long as their contents may become material in the administration of any
internal revenue law. Generally, tax returns and return information are confidential,
as required by § 6103.
The principal author of this revenue procedure is Christian Wood of
the Office of the Associate Chief Counsel (Income Tax & Accounting).
For further information regarding this revenue procedure, contact Jeffrey
Rodrick at (202) 622-4930 (not a toll-free call).
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