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The parties have proceeded in this case upon the apparent
assumption that the costs petitioner incurred in connection with
the program constitute, within the meaning of sections 62 and
162(a), either trade or business expenses (if the classification
issue were resolved in petitioners' favor), or employee business
expenses (if the classification issue were resolved in
respondent's favor). After carefully considering their arguments
in the context of the record, it would appear that the parties'
views of the forest have been blocked by the trees.
Both parties have ignored the simple fact that petitioner
did not claim any section 162(a) deductions with respect to the
program. Petitioner did report cost of goods sold on the
Schedule C. However, the elements included in a computation of a
taxpayer's cost of goods sold do not fall within the category of
expenses deductible pursuant to section 162(a).5
itemized deductions or, as contended by petitioner, he was
self-employed with respect to the services he performed as
Sheriff of Howard County related to the prisoner meal
program. If petitioner was self-employed his expenses
associated with the prisoner meal program are deductible on
Schedule C.
Although petitioners did not expressly recite specific issues in
their opening brief, see Rule 151(e)(2), it is clear from a
review of their brief that petitioners agree with respondent's
statement.
We do not rely exclusively on petitioner's Schedule C to
establish the amount of the cost of goods sold incurred by
petitioner in connection with the program. As a general rule we
regard the treatment of an item on a return as little more than
the taxpayer's claim with respect to the item. See Roberts v.
Commissioner, 62 T.C. 834, 837 (1974); Seaboard Commercial Corp.
v. Commissioner, 28 T.C. 1034, 1051 (1957). In this case the
parties have stipulated that petitioner incurred costs in the
amount reported as costs of goods sold, and respondent has
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