- 7 - left in her pocket when she got home from work, after paying for any breakage or the like and sharing tips with other employees. Although, based on petitioner's testimony, these payments might not account for the complete difference in the amounts determined by respondent and the amounts that petitioner reported, they would account for a substantial amount of the difference. Respondent recognizes that it was customary for waitresses to share tips with other employees and also to pay for breakage, walkouts, and misordered food, and that petitioner did use part of her tips for this purpose. However, it is respondent's position that these items do not reduce petitioner's gross income in arriving at adjusted gross income, but are itemized deductions which petitioner is not entitled to take, since she used the standard deduction in computing her income. Respondent claims that these amounts are employee business expenses that are not deductible because of the provisions of section 62(a) in arriving at adjusted gross income, but are itemized deductions subject to certain limitations and not deductible when the taxpayer uses the standard deduction. Section 62(a) provides for the deduction by an individual taxpayer of trade or business expenses of that taxpayer "if suchPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011