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Zibilich v. Commissioner, T.C. Memo. 1972-92; and Chippi v.
Commissioner, T.C. Memo. 1971-236.
In Chippi v. Commissioner, T.C. Memo. 1971-236, we found
that the tip income of certain waiters should be reduced by 20
percent for tips to busboys.
These cases do not specifically state whether the taxpayer
used the standard deduction or itemized deductions. No such
statement was necessary, since the reduction was in the gross
income required to be reported and, therefore, would not affect
itemized deductions or the taking of the standard deduction.
The law with respect to expenses that an employee may deduct
from gross income to arrive at adjusted gross income has not
changed since 1954 in a way to affect the issue here. Since the
enactment of the 1954 Revenue Code, an employee has been entitled
to claim business expense deductions, except those in specified
categories, only as itemized deductions and not as deductions
from gross income in arriving at adjusted gross income.4
4 The Revenue Code of 1954 as originally enacted provided--
SEC. 62. ADJUSTED GROSS INCOME DEFINED.
For purposes of this subtitle, the term "adjusted gross
income" means, in the case of an individual, gross income
minus the following deductions:
(1) Trade and business deductions.--The deductions
allowed by this chapter (other than by part VII of this
subchapter) which are attributable to a trade or
business carried on by the taxpayer, if such trade or
business does not consist of the performance of
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