- 4 -
affected by the AMT calculations. See Johnson v. Commissioner,
T.C. Memo. 1993-530. It is this distinction between employees
and self-employed persons that petitioner attacks.
To the extent a statutory classification results in
disparate treatment, the classification is permissible if it has
a reasonable relation to a legitimate governmental end. Welch v.
Henry, 305 U.S. 134, 144 (1938); Okin v. Commissioner, 808 F.2d
1338, 1342 (9th Cir. 1987), affg. T.C. Memo. 1985-199; see also
Vance v. Bradley, 440 U.S. 93, 96-97 (1979). In this regard, a
classification does not violate equal protection or due process
principles "if any state of facts rationally justifying it is
demonstrated to or perceived by the courts." United States v.
Maryland Savings-Share Ins. Corp., 400 U.S. 4, 6 (1970).
Prior to 1944, trade or business expenses were deducted from
gross income regardless of the individual's employment status.
See sec. 23(a)(1)(A), Internal Revenue Code of 1939. The
Individual Income Tax Act of 1944, ch. 210, 58 Stat. 231,
introduced the concepts "adjusted gross income", "itemized
deductions", and "standard deduction" in an effort to simplify
tax administration and compliance. See S. Rept. 885, 78th Cong.,
2d Sess. (1944), 1944 C.B. 858, 858-859. Under this scheme,
individuals may account for their deductible expenses as itemized
deductions, or they may eschew recordkeeping and claim the
standard deduction amount. See sec. 63. The amount is then
deducted from adjusted gross income.
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